(CN) — Begrudgingly resurrecting a legal-fees battle, the Ninth Circuit handed a reversal Tuesday to attorneys for a woman mistakenly put on terrorist watch lists.
Rahinah Ibrahim tapped the firm McManis Faulkner for her case after TSA agents barred her from boarding a flight out of San Francisco in 2005 to attend a conference in Hawaii.
A professor at the University Putra Malaysia in Serdang, Ibrahim had been in California as part of doctoral program at Stanford University.
Officials eventually let Ibrahim return to Malaysia, but they revoked her student visa shortly thereafter - keeping her from returning to Stanford to finish her thesis.
U.S. District Judge William Alsup found in 2014 that Ibrahim had been illegally placed on the no-fly list and a plethora of other government watch lists and terror databases. The Justice Department admitted that an FBI agent's goof led to blacklisting Ibrahim, and Alsup ordered Ibrahim removed from all databases and lists.
McManis Faulkner claimed victory - despite losing key constitutional claims - and asked for more than $3.9 million in attorneys' fees and costs. Alsup meanwhile called the demand "grossly broad," and ordered both parties to submit detailed timecards to determine how much U.S. taxpayers should cough up.
After months of wrangling, Alsup appointed special master Gina Moon of the San Francisco firm Clarence Dyer & Cohen to sort it out. Moon issued a 117-page report recommending $419,987.36 for McManis Faulkner, which Alsup accepted in full.
Undeterred, Ibrahim's lawyers demanded another $85,467.50 for the work they did objecting to Moon's report. Alsup rejected that move outright.
The Ninth Circuit reversed in part Tuesday, saying Alsup went too far in disallowing the firm's requested fees.
Alsup "disallowed fees for discrete positions taken by the government because, in [his] view, the government's positions in each instance were substantially justified. It was error to do so," the 33-page opinion states.
Senior U.S. District Judge Royce Lamberth wrote for the circuit's three-judge panel. Normally presiding in Washington, Lamberth joined the federal appeals court by designation.
Breaking with the D.C. Circuit and the Seventh Circuit, the San Francisco-based panel said the Supreme Court's 1990 decision in Commissioner INS v. Jean requires a judge to consider the case for fee eligibility as an inclusive whole.
"Courts are to make but one substantial justification determination on the case as a whole," Lamberth said. "That is not to say a court may not consider the government's success at various stages of the litigation when making that inquiry, but those separate points of focus must be made as individual inquiries collectively shedding light on the government's conduct on the whole, rather than as distinct stages considered in isolation."
Lamberth did agree with Alsup, however, that the government did not act in bad faith by placing Ibrahim on the no-fly list, or by asserting that she lacked standing to challenge her placement on the list. Without a finding of bad faith, the Equal Access to Justice Act caps recovery of attorneys' fees at $125 per hour.
"Prior to this suit no court had held a foreign national such as Ibrahim possessed any right to challenge their placement - mistaken or not - on the government's terrorism watchlists," Lamberth said. "It accordingly could not have been bad faith to assert, as the government did, that Ibrahim possessed no such right."
The court affirmed that Ibrahim's attorneys are not entitled to fees for their work on her First Amendment and equal protection claims, because they were mutually exclusive with her successful due-process claim.
"We pause to note that we offer no view on the appropriateness of the amount already awarded by the district court in this case," Lamberth concluded. "It may well be Ibrahim is entitled to substantially more or substantially less than that amount. But until an amount is fixed in accordance with applicable law, we are unable to pass upon that question."
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