STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS BAYFRONT MEDICAL CENTER, INC.; CAPE MEMORIAL HOSPITAL, INC., d/b/a CAPE CORAL HOSPITAL; CGH HOSPITAL, LTD., d/b/a CORAL GABLES HOSPITAL; DELRAY MEDICAL CENTER, INC., d/b/a DELRAY MEDICAL CENTER; LEE MEMORIAL HEALTH SYSTEM; ET AL., Petitioners, vs. Case No. 12-2757RU AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. / ORDER AWARDING FEES AND COSTS Administrative Law Judge, John D.C. Newton, II, of the Division of Administrative Hearings, conducted the final hearing in this matter on April 5, 2016, in Tallahassee, Florida. APPEARANCES For Petitioner: Harvey W. Gurland, Esquire Joanne Barbara Erde, Esquire Donna Holshouser Stinson, Esquire Duane Morris, LLP Suite 3400 200 South Biscayne Boulevard Miami, Florida 33131 For Respondent: Alex B.C. Ershock, Esquire Roberts Reynolds Bedard & Tuzzio PLLC 470 Columbia Drive, Suite C101 West Palm Beach, Florida 33409
Karen A. Brodeen, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES (A) What is the amount of reasonable attorney s fees and taxable costs Respondent, Agency for Health Care Administration (Agency), must pay Petitioners, Bayfront Medical Center, Inc., et al (Hospitals), for this unpromulgated rule challenge before the Division of Administrative Hearings (Division). (B) What is the amount of reasonable attorney s fees the Agency must pay Hospitals for appellate proceedings before the First District Court of Appeal in this matter? PRELIMINARY STATEMENT In this case, Bayfront Medical Center, Inc., and 17 other hospitals collectively filed a Petition for Determination of Invalidity of Non-Rule Policy against the Agency with the Division. The petition asserted that the Agency practice of declining to pay hospitals Medicaid-funded compensation for emergency medical services provided to undocumented aliens once the patients reached a point of stabilization was a rule as defined in section 120.52(16), Florida Statutes (2012) 1/. Since the practice amounted to a rule and had not been promulgated, the Hospitals argued, the Agency could not follow its practice of using the stabilization standard. The Hospitals prevailed. 2
The Final Order in this proceeding concluded: [T]he Agency's statements about and application of the "stabilization" standard meet the definition of a rule that has not been adopted pursuant to section 120.54(1). The Agency must immediately discontinue all reliance upon the "stabilization" standard or any substantially similar statement as a basis for agency action. The Final Order also concluded that the Hospitals were entitled to recover fees and costs in this action pursuant to section 120.595(4)(a). The Agency appealed to the First District Court of Appeal. After oral argument the Agency dismissed its appeal. The court s opinion allowing the Agency to dismiss its appeal stated: Here, the administrative law judge (ALJ) found that AHCA was operating under an unpromulgated rule which was not required by the Federal Government. AHCA has sought to voluntarily dismiss this court s review of that finding. Thus, the ALJ s finding entitles appellees to reasonable attorney s fees during the entire duration of these proceedings. As such, we accept the voluntary dismissal, but we grant appellees motion for appellate attorney s fees and remand for a determination of the amount if the parties are unable to reach an agreement. The parties did not reach agreement. After several continuances granted at the request of the parties, the final hearing was conducted April 5, 2016. The Hospitals presented the testimony of Joanne B. Erde, Esquire, and expert witness 3
David Ashburn, Esquire. Hospitals Exhibits 1 through 7, 10 and 11 were admitted into evidence. The Agency presented the testimony of its expert witness, M. Christopher Bryant, Esquire. Agency s Exhibits 4 through 6 were admitted into evidence. The parties requested and received additional time to file proposed final orders. The parties timely filed proposed final orders. They have been considered in the preparation of this Order. FINDINGS OF FACT Proceedings Before the Division of Administrative Hearings and the First District Court of Appeal 1. In the beginning this was an action by the Hospitals aimed at stopping Agency efforts to recoup reimbursement of Medicaid payments to the Hospitals for emergency services provided to undocumented aliens once the patients have reached a point of stabilization. The issue of whether the Agency could apply the stabilization standard to the Hospital claims for Medicaid payment for services provided indigent aliens recurred in Agency claims against hospitals throughout the state to recoup Medicaid payments. Hospitals challenged Agency claims in individual proceedings under section 120.569, which the Agency referred to the Division for disputed fact hearings. Duane Morris, LLP (Duane Morris), led by Joanne Erde, represented the hospitals in the individual proceedings. 4
2. The Hospitals collectively engaged Duane Morris to represent them in this proceeding challenging the Agency s stabilization standard as an unpromulgated rule. Joanne B. Erde, Donna Stinson, and Harry Silver were the Hospital s lawyers in this proceeding. Ms. Erde is an experienced lawyer who has focused her practice in health care. Ms. Stinson is an experienced lawyer who concentrated her practice in health care and administrative law litigation before the Division. The Agency does not question their expertise. Mr. Silver is an experienced lawyer with no Florida administrative law experience. His role in the case was minimal. 3. Depositions taken in one of the individual reimbursement cases were significant evidence in this proceeding. Those depositions make it clear that the Hospitals counsel was tuned into the unpromulgated rule issue and using discovery in that case to gather and identify the evidence that they would need in this case. Representation of the Hospitals in individual reimbursement actions provided Hospitals counsel the advantage of preparing with level of detail before filing the petition. 4. The engagement letters recognize this stating: We have an understanding of the facts underlying this matter and have substantial knowledge concerning the law governing the issues in this case. This well-developed understanding of the 5
facts should have minimized the need for discovery and preparation in this proceeding. Counsel were well positioned to prosecute this matter efficiently. Likewise, counsel s substantial knowledge concerning the law governing the issues in this case should have minimized the need for time spent in research. This is not what happened. 5. The pre-existing representation in the reimbursement cases provided another obvious and significant benefit to the Hospitals and their counsel. Since counsel represented the individual hospital in the separate reimbursement matters, the Hospitals could band together to jointly finance one case that would resolve the troublesome point of stabilization issue more consistently and more cheaply than if they litigated it in each and every case. As the basically identical engagement agreements between each hospital and counsel state: Because many hospitals interests in [sic] are similar or identical as it relates to the Alien Issue and in order to keep legal costs to a minimum, each of the participants in the [hospital] Group will [sic] have agreed that it wishes this firm to represent them in a Group. 6. Because of counsel s pre-existing relationships with the Hospitals, litigating this matter should have continued or enhanced the client relationships. The time required for this matter could not result in lost business opportunities. In 6
fact, by consolidating the issues common to all the clients and their cases, counsel freed up time to work on other matters. Presentation of the issue for resolution in a single case also saved the Hospitals the greater cost of disputing the issue in each case where the Agency sought reimbursement. 7. The Hospitals and counsel dealt with the only possible downside of the representation by including disclosures about joint representation and a waiver of conflict claims in the engagement letters. 8. This was not a contingent fee case. The agreement provided for monthly billing and payment from counsel s trust account. Each group member made an initial payment of $10,000 to the trust account. Any time the trust account balance dipped below $15,000, each group member agreed to contribute another $10,000 to the trust account. For counsel, this representation was about as risk free as a legal engagement can be. 9. The Hospitals and their counsel knew from the outset that they would have to prove their reasonableness of their fees and costs if they prevailed and wanted to recover fees. The Petition for Determination of Invalidity of Non-Rule Policy seeks an award of fees and costs. They could have adjusted their billing practices to provide more detail in preparation for a fees dispute. 7
10. An "unpromulgated rule challenge" presents a narrow and limited issue. That issue is whether an agency has by declaration or action established a statement of general applicability that is a "rule," as defined in section 120.52(16), without going through the required public rulemaking process required by section 120.54. The validity of the agency's statement is not an issue decided in an "unpromulgated rule challenge." 11. Courts have articulated the legal standards for unpromulgated rule challenges frequently. See, e.g., Coventry First, LLC v. Off. of Ins. Reg., 38 So. 3d 200, 203 (Fla. 1st DCA 2010); Dep t of Rev. v. Vanjaria Enters., 675 So. 2d 252 (Fla. 5th DCA 1996); and the cases those opinions cite. 12. The facts proving the stabilization standard were easy to establish. Many Agency documents stated the shift to the stabilization standard. Documents of Agency contractors did also. Two examples of how clear it was that the Agency was applying a new standard were the Agency s statements in its 2009-2010 and 2010-2011 reports to the Governor on efforts to control Medicaid fraud and abuse. The reports describe the stabilization standard as more stringent and certain to recover millions of dollars for the Agency. 13. As the Agency s reports to the Governor indicate, the stakes were high in this matter. For the Hospitals and other 8
hospitals collectively affected by the Agency s effort to recoup past payments by applying the stabilization standard, $400,000,000 was at stake. 14. This matter did not present complex or difficult issues, legally or factually. 15. The Order of Pre-Hearing Instructions requiring parties to disclose documents and witnesses and update the disclosures alleviated the discovery demands present in other litigation. The Agency s failure to fully comply with the prehearing instructions and unfounded Motion in Limine added some additional time demands for the Hospital s counsel. Nonetheless the issues were narrow, and the facts were essentially undisputed, if not undisputable. This matter did not require extraordinary amounts of time for discovery or preparation. 16. Ordinarily challenges to rules or unpromulgated rules impose time pressures on the attorneys because of the requirement in section 120.56 that the hearing commence within 30 days of assignment to the Administrative Law Judge. The time constraint was not a factor in this case. The Hospitals requested waiver of the time requirement to permit more time for discovery. The Agency agreed, and the undersigned granted the request. Thus the Hospitals had the time their counsel said they needed to prepare for the hearing. 9
17. The appeal imposed no time constraints. Both parties received extensions of time for their filings. Seventeen months passed between filing the notice of appeal and oral argument. Time for the Administrative Proceeding 18. The total number of hours claimed for the services of the three lawyers, their claimed hourly rate, and the total fees claimed appear below. Joanne B. Erde 458.20 hours $550.00 rate $252,010.00 Donna Stinson 136.20 hours $455.00 rate $61,971.00 Harry Silver 93.40 hours $550.00 rate $51,370.00 Total 687.80 hours $365,351.00 19. The Hospitals counsel s billing records are voluminous. For the proceeding before the Division, the Hospitals counsel s invoices list 180 billing entries for the work of three lawyers. A substantial number of the entries are block billing. In block billing, all of a lawyer s activities for a period of time, usually a day, are clumped together with one time total for the entire day s service. It is an acceptable form of billing. But block billing presents difficulties determining the reasonableness of fees because a single block of time accounts for several different activities and the invoice does not establish which activity took how much time. 20. Here are representative examples of the block billing entries from the Division level invoices: 10
August 20, 2012 (Erde) Conference call with ALJ; telephone conference with AHCA attorney; telephone conference with newspaper reporters 2.0 hours September 16, 2012 (Erde) Review depositions; prepare opening remarks; develop impeachment testimony 5.50 September 27, 2012 (Erde) Intra-office conference; finalize interrogatories; work on direct 8.50 October 2, 2012 (Stinson) Review and revise Motion in Limine; Telephone conferences with Joanne Erde and Harry Silver; review emails regarding discovery issues - `2.60 October 19, 2012 (Erde) Intra-office conference to discuss proposed order; Research Re: other OIG audits; research on validity of agency rules 2.10 hours November 9, 2012 (Erde) Conference with ALJ; Intra-Office conference to discuss status; further drafting of proposed order 7.70 hours. November 19, 2012 (Stinson) Final Review and Revisions to Proposed Final order; Telephone conferences with Joanne Erde to Review final Changes and comments; Review AHCA s proposed order and revised proposed order 3.20 hours. 21. Many of the entries, block or individual, do not provide sufficient detail to judge the reasonableness of the time reported. Prepare for deposition and hearing, review depositions, review new documents, review draft documents, intra-office conference and attention to discovery are recurrent examples. 22. Senior lawyers with more expertise and higher billing rates are expected to be more efficient. This, the fact that the matter was not complicated, the relative simplicity of the issue, and the fact that the Hospitals counsel already had a great deal of familiarity with the facts and law involved, all require reducing the number of hours compensated in order for them to be reasonable. For this matter, in these circumstances, 11
the claimed number of hours is quite high. The claimed 687.80 hours amounts to working eight hours a day for 86 days, two of which were the hearing. This is not reasonable. 23. A reasonable number of hours for the proceedings before the Division is 180. That is the equivalent of 22.5 eight-hour days. That is sufficient to handle the matter before the Division from start to finish. The number includes consideration of the worked caused by the needless difficulties presented by the Agency in discovery and with its Motion in Limine. Time for the Appellate Proceeding 24. The fees that the Hospitals seek for the appeal are broken down by hours and rates as follows: Joanne B. Erde 255.10 hours $560.00 $142,856.00 Joanne B. Erde 202.80 hours $580.00 $117,624.00 Donna Stinson 88.50 hours $460.00 $40,710.00 Donna Stinson 67.10 hours $500.00 $33,550.00 W.D. Zaffuto 48.30 hours $435.00 $21,010.50 Rob Peccola 10.90 hours $275.00 $2,997.50 Rob Peccola 17.50 hours $300.00 $5,250.00 L. Rodriguez- 6.20 hours $520.00 $3,224.00 Taseff L. Rodriguez- Taseff 19.50 hours $545.00 $10,627.50 Rachel Pontikes 38.20 hours $515.00 $19,673.00 Total 754.10 hours $397,522.50 25. For the appellate proceeding, the invoices present 341 entries, a substantial number of which are block billing for work by six lawyers. Here are representative examples from the appellate level invoices: 12
May 16, 2013 (Erde) Reviewed AHCA s initial brief; intraoffice conference to discuss; preliminary review of record 2.90 May 24, 2013 (Erde) Intra-office conference to discuss response to brief; preparation to respond to brief 2.50 May 30, 2013 (Erde) Attention to Appeal issues; finalize request for extension; brief research re jurisdictional issues 1.60 June 18, 2013 (Peccola) Strategy with J. Erde regarding research needs; review/analyze case law cited in answer brief; conduct legal research regarding documentary evidence and exhibits on appellate review; write email memo to J. Erde regarding same 2.00 July 19, 2013 (Zaffuto) Revise/draft Answer Brief; discuss extension of time with H. Gurland; research appellate rules regarding extension of time and staying proceedings pending ruling on motion; review appendix to answer brief; instructions to assistant regarding edits and filing of answer brief and appendix prepare answer brief for filing; call to clerk regarding extension of time review initial brief by AHCA and final order by ALJ 5.50 August 14, 2013 (Erde) Intra-office conference to discuss brief; further revised brief 5.80 August 15, 2013 (Stinson) Reviewed appellees' answer brief; discussed language in answer brief with Joanne Erde 2.50 October 9, 2013 (Stinson) Review draft motion to relinquish regarding admission of exhibit; exchange e-mails with Joanne Erde; telephone conference with Joanne Erde 1.60 October 10, 2013 (Erde) Attention to new motion re relinquishing jurisdiction; review of revisions; further revisions 6.00 October 30, 2013 (Erde) Research re: AHCA s current behavior; intra-office conference to discuss status of action at DOAH -.70 November 7, 2013 (Peccola) Strategy with J. Erde regarding Appellees response in opposition to Appellant s motion for supplemental briefing; conduct research regarding same; draft same; look up 1st DCA local rule on appellate motions and email same to J. Erde 3.60 December 5, 2013 (Erde) Research Re: supplemental briefing issues; research to find old emails from AHCA re: inability to produce witnesses -.90 January 21, 2014 (Rodriguez-Taseff) Working on Supplemental Answer Brief legal argument re authentication and cases distinguishing marchines [sic]; editing facts 6.70 13
February 3, 2014 (Erde) Review and revise response to motion for further briefing; intra-office conference to discuss same 2.20 May 2, 2014 (Pontikes) Continue to review relevant case law regarding the definition of an unpromulgated rule; continue to analyze the briefs and the arguments; continue to draft an outline of the argument discussed 5.00 June 5, 2014 (Erde) draft email to group regarding AHCA s settlement offer; reviewed supplemental settlement offer from AHCA; draft email to group re same 1.70 June 11, 2014 (Erde) Attention to finalizing response to AHCA s notice of dismissal and filing of fee petition; memo to members of group 8.00 July 21, 2014 (Erde) completed motion for rehearing re: fees as sanctions; drafted status report for DOAH regarding status of DCA opinion; drafted status report in companion case; emails with AHCA re: withdrawing pending audits 6.90 July 21, 2014 (Peccola) Strategy with D. Stinson and J. Erde regarding motion for rehearing; revise/edit same; review/revise edit notices in trial court 1.20. 26. The descriptive entries in the invoices for the appellate representation also lack sufficient detail. Examples are: begin preparation to respond to AHCA s brief, attention to appeal issues, preparation to draft answer brief, and research and draft answer brief. 27. For the appellate proceedings, Duane Morris added four lawyers, none with experience in Florida administrative or appellate matters. W.D. Zaffuto, L. Rodriguez-Taseff, and Rachel Pontikes are senior level lawyers in Duane Morris offices outside of Florida. Rob Peccola is a junior level lawyer from a Duane Morris office outside of Florida. The apparent result is those lawyers spending more time on issues than the more experienced Ms. Erde and Ms. Stinson would. 14
28. One example of this is a July 19, 2013, billing entry where a lawyer spent time researching appellate rules regarding extension of time and staying proceedings pending ruling on motion. The two lawyers primarily responsible for this matter, both laying claim to Florida appellate expertise, would only need to quickly check the Florida Rules of Appellate Procedure to confirm their recollection of the rules, something that would probably take less time than it took to make the time entry and review the draft bill. 29. Hospitals also filed a puzzling motion that presents a discreet example of needless attorney time billed in this matter. The Hospitals expended 21.8 hours on a Motion for Rehearing of the court s order awarding them fees and costs. The court s opinion and the Final Order stated that fees and costs were awarded under section 120.595(4)(a), Florida Statutes. Yet the Hospitals motion fretted that fees might be assessed under section 120.595(4)(b), which caps fees at $50,000. The court denied the motion. 30. Two things stand out when reviewing the invoices for the appellate proceeding. The first is that the appeal took more hours than the trial proceeding. A trial proceeding is generally more time-consuming because of discovery, a hearing much longer than an oral argument, witness preparation, document review, and preparing a proposed order. 15
31. The second is the sheer number of hours. Hospitals counsel seeks payment for 754.10 hours in the appellate proceeding. This is 66.3 more than for the Division proceeding. It included a two day hearing, trial preparation, research, and preparing a 37 page proposed final order. In eight-hour days the claimed hours amount to a staggering 94.26 days. That amounts to one lawyer working on the appeal for eight hours a day for three months. 32. Of this time, 613.5 hours were spent by Ms. Erde and Ms. Stinson, lawyers with expertise in the subject area, who had prepared the case for hearing, who participated in the hearing, who closely reviewed the entire record for preparation of their proposed final order, who researched the issues before the hearing and for the proposed final order, and who wrote the proposed final order. With all this knowledge and experience with the record and the law, handling the appeal should have taken less time than the proceeding before the Division. 2/ 33. One factor supports the appellate proceeding taking as many hours, or a few more hours, than the administrative proceeding. It is the Agency s disputatious conduct over a scrivener s error in the Final Order which erroneously stated that the Agency s Exhibit 1 had been admitted. The Agency s conduct increased the time needed to represent the Hospitals in the appeal. 16
34. The Agency relied upon the exhibit in its initial brief, although it twice cited page 359 of the transcript where the objection to the exhibit was sustained. Also the Agency s and the Hospitals proposed final orders correctly stated that Agency Exhibit 1 had not been admitted. 35. The Hospitals Answer Brief noted that Agency Exhibit 1 had not been admitted. The transcript of the final hearing and both parties proposed final orders were clear that the exhibit had not been admitted. Yet the Agency argued in its Reply Brief that it had been. 36. This required the Hospitals to move to remand the case for correction of the error. The Agency opposed the motion. The court granted the motion. The Final Order was corrected and jurisdiction relinquished back to the court. The Agency used this as an opportunity to trigger a new round of briefing about whether Exhibit 1 should have been admitted. This has been considered in determining the reasonable number of hours for handling the appeal. 37. A reasonable number of hours for handling the appeal is 225. Converted to eight-hour days, this would be 28.13 days. 38. For the appeal, Duane Morris attributes 28.4 hours of the work to a junior lawyer. This is 3.8 percent of the total time claimed. Applying that percentage to 225 hours, results in 17
8.6 hours attributed to the junior lawyer with the remaining 216.45 hours attributed to senior lawyers. Attorneys and Fees 39. Each party presented expert testimony on the issues of reasonable hours and reasonable fees. The Agency presented the testimony of M. Christopher Bryant, Esquire. The Hospitals presented the testimony of David Ashburn, Esquire. 40. As is so often the case with warring experts, the testimony of the witnesses conflicts dramatically. Mr. Bryant opined that a reasonable rate for senior lawyers, such as Ms. Erde and Ms. Stinson, ranged between $350 and $450 per hour. The reasonable rate for junior lawyers was $200 per hour. Mr. Ashburn opined that the reasonable hourly rate for senior lawyers ranged between $595 and $700 and the reasonable rate for junior lawyers was between $275 and $300. 41. The contrast was the same for the opinions on the reasonable number of hours needed to handle the two stages of this litigation. Mr. Bryant testified that the administrative proceeding should have taken 150 to 170 hours and that the appeal should have taken 175 to 195 hours. Mr. Ashburn testified that the Hospitals claimed 687 hours for the proceeding before the Division and 754.10 hour for the appellate proceeding were reasonable. 18
42. The Hospitals argue that somehow practicing in a large national law firm, like Duane Morris justifies a higher rate. The theory is unpersuasive. A national law firm is nothing special. There is no convincing, credible evidence to support a conclusion that lawyers from a national firm in comparison to smaller state or local firms provide better representation or more skilled and efficient lawyering that justifies a higher rate. 43. Based upon the evidence presented in this record, a reasonable rate for the senior lawyers participating in this matter is $425 per hour. A reasonable rate for the junior lawyer participating in this matter is $200.00. Fee Amounts 44. A reasonable fee amount for representation in the proceeding before the Division of Administrative Hearings is $76,500. A reasonable fee amount for the proceeding before the First District Court of Appeal is $93,701.25. Costs 45. Hospitals seek $6,333.63 in costs. The evidence proves these costs are reasonable. The Agency does not dispute them. 19
CONCLUSIONS OF LAW Jurisdiction 46. The Division has jurisdiction over the parties to and the subject matter of this matter. 120.569, 120.57(1), and 120.595, Fla. Stat. (2015); First DCA Opinion in Case No. 1D13-0224 (July 16, 2014). Basic Principles 47. Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), as modified by Standard Guaranty Insurance Company v. Quanstrom, 555 So. 2d 828 (Fla. 1990), requires using a lodestar approach and considering the eight factors articulated in Rule 4-1.5(a), Florida Rules of Professional Conduct. Sunshine State Ins. Co. v. Davide, 117 So. 3d 1142, 1144 (Fla. 3d DCA 2013). 48. The party seeking fees must prove that the fees claimed and the time for which they seek payment are reasonable. See City of Miami v. Harris, 490 So. 2d 69 (Fla. 3d DCA 1985). The evidence must be sufficient to show what services were performed. See Warner v. Warner, 692 So. 2d 266, 268 (Fla. 5th DCA 1997); Tucker v. Tucker, 513 So. 2d 733, 735 (Fla. 2d DCA 1987). Useful evidence includes invoices, records, testimony and other information detailing services provided. Braswell v Braswell, 4 So. 3d 4, 5 (Fla. 2d DCA 2009). 20
49. Records should permit a judge to feasibly and expeditiously engage in review. They must provide sufficient detail to permit appraisal of their reasonableness. ECOS, Inc. v. Brinegar, 671 F. Supp. 381, 394 (M.D.N.C. 1987); Accord Smith v. Smith, 764 So. 2d 650, 651 (Fla. 1st DCA 2000); Cf. N.D. Fla. Loc. R. 54.1(c)( A detailed record must provide enough information to allow the Court to evaluate reasonableness; an entry like research or conference without a description of the subject will not do. ) Many of the invoice descriptions of work performed do not provide sufficient detail. 50. Where fee documentation is voluminous, like here, a court may make an across-the-board reduction in hours. Kenny A. v. Perdue, 532 F.3d 1209, 1220 (11th Cir. 2008). 3/ See also, Loranger v. Stierheim, 10 F.3d 776, 783 (11th Cir. 1994) ( [A]cross-the-board percentage cuts in the number of hours claimed or in the final lodestar figure may be an appropriate utilitarian approach). An across-the-board reduction in hours is the practical approach in this case. 51. The tribunal awarding fees should review the evidence and identify the hours disallowed and the reasons for disallowance. Norman v. Housing Auth., 836 F.2d 1292, 1304 (11th Cir.1988). The judge is also an expert on the issue of reasonable and proper fees and may consider his own knowledge and experience when forming a judgment on the value of services 21
provided. Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir. 1994), citing Norman, 836 F.2d at 1303. 52. Lawyers and clients may agree to any fee, staffing, and billing arrangements that they wish. But, when the fee is shifted to another party, only reasonable fees are awarded. Hollub v. Clancy, 706 So. 2d 16, 18-19 (Fla. 3d DCA 1997). 53. The standard for the legal service provided is effective and competitive representation, not perfect representation. Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 953-54 (1st Cir. 1984). Application of the Eight Factors 54. Rowe requires first determining a lodestar fees figure by multiplying the reasonable hourly rates by the number of hours reasonably spent on the litigation, applying the eight factors of Rule 4-1.5(b) of the Florida Bar Rules of Professional Conduct. Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 830 (Fla. 1990). "Reasonably expended" means the time that ordinarily would be spent by lawyers in the community to resolve this particular type of dispute. It is not necessarily the number of hours actually expended by counsel in the case. See In re Estate of Platt, 586 So. 2d 328, 333 (Fla. 1991) (discussing Rowe factors in estate case). 22
55. The eight factors of Rule 4-1.5(b) of the Florida Bar Rules of Professional Conduct and an evaluation of each in light of the Findings of Fact follows. (A) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly- This matter did not present a novel or difficult question. The governing law is well established, and the evidence needed was readily available. It did not require extensive time and labor. Ms. Erde and Ms. Stinson provided an above-average level of experience and skill. The $425 hourly rate reflects that. (B) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer -Representing the Hospitals in this matter did not have the potential to preclude other employment. If anything the reverse is true. (C) The fee customarily charged in the locality for similar legal services- Expert testimony was presented and considered. The persuasive credible evidence established that the customary fee for similar legal services in the community where challenges to unpromulgated rules must be litigated is $425 per hour for senior lawyers and $200 per hour for junior lawyers. 23
(D) The amount involved and the results obtained- The amount potentially involved was $400,000,000. The result was success. 56. After consideration of all the Rowe factors, the reasonable fee for representation in the proceeding before the Division is $76,500. After consideration of all the Rowe factors, the reasonable fee for representation in the appellate proceedings is $93,711.25. Costs 57. The Hospitals spent $6,333.63 for deposition costs, external printing and duplicating for the hearing and depositions, and for the final hearing transcripts. These costs are reasonable and not challenged by the Agency. 24
ORDER Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that the amount of attorney s fees assessed against the Agency for Health Care Administration is $170,211.25. The amount of costs assessed against the Agency for Health Care Administration is $6,333.63. The Agency shall pay these fees and costs, totaling $176,544.88, within 30 days from the date of this Order. DONE AND ORDERED this 1st day of August, 2016, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 2016. 1/ ENDNOTES All citations to Florida Statutes are to the 2012 compilation unless noted otherwise. 25
2/ It is simply not conceivable to us that the ablest of lawyers, having covered the same ground in arguments in the district court, would have required the equivalent of a full week and a half of a billable hours to prepare for oral argument. See Grendel s Den, Inc. v. Larkin, 749 F.2d 945, 953-54 (1st Cir. 1984). 3/ The Florida Supreme Court opinions in Florida Compensation Fund v. Rowe and Standard Guaranty Insurance Co. v. Quanstrom rely upon federal court opinions. This makes consideration of federal court opinions appropriate in this Order. See InPhyNet Contr. Servs. v. Matthews, Case No. 4D14-3382 (Fla. 4th DCA June 22, 2016), 2016 Fla. App. Lexis 9594, 41 Fla. L. Weekly D1464 (Fla. 4th DCA June 22, 2016) and Vantage View v. Bali E. Dev. Corp., 421 So. 2d 728, 731 n.3 (Fla. 4th DCA 1982) (federal cases interpreting Federal Rules of Civil Procedure similar to Florida Rules are persuasive authority). COPIES FURNISHED: Joanne Barbara Erde, Esquire Duane Morris LLP Suite 3400 200 South Biscayne Boulevard Miami, Florida 33131 (eserved) Donna Holshouser Stinson, Esquire Duane Morris Suite 3400 200 South Biscayne Boulevard Miami, Florida 33131-2318 (eserved) Harvey W. Gurland, Esquire Duane Morris, LLP Suite 3400 200 South Biscayne Boulevard Miami, Florida 33131 (eserved) Alex B.C. Ershock, Esquire Roberts Reynolds Bedard & Tuzzio PLLC 470 Columbia Drive, Suite C101 West Palm Beach, Florida 33409 (eserved) 26
Karen A. Brodeen, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 (eserved) Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eserved) Elizabeth Dudek, Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308 (eserved) Stuart Williams, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eserved) NOTICE OF RIGHT TO JUDICIAL REVIEW A party who is adversely affected by this Final Order is entitled to judicial review pursuant to section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of administrative appeal with the agency clerk of the Division of Administrative Hearings within 30 days of rendition of the order to be reviewed, and a copy of the notice, accompanied by any filing fees prescribed by law, with the clerk of the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides or as otherwise provided by law. 27