SAN FRANCISCO (CN) - A divided en banc panel of the Ninth Circuit on Wednesday struck down as inadequate a fee award of more than $400,000 for the pro bono lawyers who won their Malaysian client's removal from the federal government's no-fly list, an amount the attorneys called a "pittance."
In an 8-3 decision, the appellate panel's majority reversed U.S. District Judge William Alsup's finding that the government prosecuted its case against Rahinah Ibrahim in good faith. The reversal will potentially award lawyers at San Jose, California-based civil-rights firm McManis Faulkner millions in market-rate fees for the nine years they worked on the litigation.
"The district court clearly erred by failing to consider the totality of the government’s conduct," which included the decision to defend the case for nearly a decade despite knowing since 2005 that Ibrahim was not a terror threat, U.S. Circuit Judge Kim McLane Wardlaw wrote for the majority in a 76-page opinion.
"Dr. Ibrahim should not have had to endure over a decade of contentious litigation, two trips to the court of appeals, extensive discovery, over 800 docket entries amounting to many thousands of pages of record, and a weeklong trial the government precluded her (and her U.S.-citizen daughter) from attending, only to come full circle to the government’s concession that she never belonged on the No Fly list at all—that she is not and never was a terrorist or threat to airline passenger or civil aviation security," added Wardlaw, a Clinton appointee.
McManis Faulkner took on Ibrahim’s case after Transportation Security Administration agents arrested her in 2005 while she boarded a flight out of San Francisco International Airport to attend a conference in Hawaii.
Now an architecture dean at the University Putra Malaysia in Serdang, Ibrahim had been in California studying for a doctorate in construction engineering at Stanford University. Officials eventually allowed Ibrahim to return to Malaysia but revoked her student visa, which kept her from returning to Stanford to complete her thesis.
In 2014, Alsup ordered Ibrahim removed from the no-fly list and other terrorism watchlists after the U.S. Justice Department acknowledged she had been mistakenly placed on them due to a clerical error.
But he also called McManis Faulkner's request for $3.6 million in attorneys' fees and costs “grossly overbroad” and approved an award of $419,987.36 instead.
A three-judge Ninth Circuit panel partly reversed in 2016, finding Alsup shouldn’t have forbidden attorney’s fees for work on a number of issues for which the government had shown its position was “substantially justified” under the Equal Access to Justice Act (EAJA).
But at that time, the Ninth Circuit upheld Alsup’s finding that the government didn’t act in bad faith, and concluded that he had therefore correctly declined to award McManis Faulkner market-rate fees. Without a bad-faith finding, the EAJA caps attorneys’ fees at $125 per hour.
Ibrahim petitioned for en banc review, accusing the government of a slew of bad-faith moves aimed at derailing her case.
Wardlaw accepted her bad-faith arguments, chastising Alsup on Wednesday for failing to consider multiple examples of suspect behavior by the government during the protracted litigation, such as telling Alsup and Ibrahim's lawyers it wouldn't rely on state-secrets evidence withheld based on privilege.
"And yet, after these representations, the government raised the very argument it had promised to forego," Wardlaw wrote. "This is precisely the type of 'abusive litigation' disavowed in the EAJA, which is focused on 'protecting the integrity of the judicial process,'” she wrote, quoting from the D.C. Circuit's 1979 decision in Copeland v. Martinez.
Whether McManis Faulkner will be awarded the requested $3.6 million in fees is still an open question. Even with a bad-faith finding, Alsup has discretion in calculating the final, market-rate fee award.
McManis Faulkner’s Elizabeth Pipkin said by phone Wednesday that the lawyers’ request for $3.6 million was “reasonable.” "That is what was required to win the case," she said. “We’re talking about nine years of litigation."
In a partial dissent, U.S. Circuit Judge Consuelo Callahan, joined by Senior U.S. Circuit Judge N. Randy Smith and U.S. Circuit Judge Jacqueline Nguyen, said the majority had "turn[ed] the standard of review on its head by analyzing and emphasizing the pieces of evidence that it concludes 'support a bad faith finding.'"
Reviewing Alsup's findings for "clear error," the minority concluded none of Ibrahim's arguments passed muster, including arguments that the government disregarded an order to remove Ibrahim from all federal watchlists and continued litigating the case after discovering its mistake.
"[T]his argument fails to acknowledge the evolution of the law—which has been prompted, at least in part, by this litigation," Callahan wrote in an eight-page dissent. "We now know that Dr. Ibrahim was placed on the watchlist by the mistake of a single federal employee. Moreover, at the time Dr. Ibrahim was placed on the government’s watchlist, there was no uniform standard."
Callahan and Smith were both appointed by President George W. Bush, and Nguyen by President Barack Obama.
The Justice Department could not be reached for comment due to the federal government shutdown.
U.S. Circuit Chief Judge Sidney Thomas and U.S. Circuit judges Marsha Berzon, Morgan Christen, William Fletcher, M. Margaret McKeown and Paul Watford also sat on the panel.
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