Gibson, Dunn & Crutcher Gibson Dunn offices in Washington. Credit: Diego M. Radzinschi/ ALM

Gibson, Dunn & Crutcher is asking the U.S. government to pay more than $800,000 in legal fees for a pro bono victory in the U.S. Supreme Court in June. But whether and how much the firm is paid will place new scrutiny of the government's changed position in the case at the high court.

Mark Perry, the lead Gibson Dunn partner in the case Lucia v. SEC, which challenged the constitutionality of how administrative law judges were appointed, on Thursday filed the fee request under the Equal Access to Justice Act in the U.S. Court of Appeals for the D.C. Circuit.

Mark Perry

“The SEC has for years been violating the constitutional rights of respondents in administrative enforcement proceedings, including other clients of the firm,” Perry said in a statement to The National Law Journal on Friday. “Ensuring that the government adheres to the separation of powers, which protects the liberty of all Americans, is the very definition of pro bono publico.”

In Lucia, a 7-2 high court said administrative law judges at the U.S. Securities and Exchange Commission are “officers” within the meaning of the Constitution's appointments clause and the judge in Raymond Lucia's case at the securities agency was not properly appointed. He was entitled to a new hearing on securities charges before a properly appointed judge, the majority held. The ruling cast some uncertainty over the thousands of administrative law judges serving across the federal bureaucracy, and litigation has ensued over the scope of the court's decision.

The Obama administration's Justice Department in the D.C. Circuit had defended the SEC's view that administrative law judges were not “officers” under the appointments clause. But in the Supreme Court, the Trump administration changed position “upon further consideration” and sided with Lucia.

Under the Equal Access to Justice Act, a “prevailing party” in civil litigation against the federal government is entitled to fees and other expenses unless the court finds that the government's position was “substantially justified.” The government has the burden to show that its position had “a reasonable basis both in law and fact.”

Perry argues the government cannot meet that burden.

Even after telling the Supreme Court that its prior litigating position was wrong, Perry said in Gibson Dunn's fee request, “the government refused to concede that the constitutional violation required a meaningful remedy—asking the Supreme Court, instead, merely to remand for 'further proceedings.' The Supreme Court rejected that position, too, holding that a 'new hearing' before a different adjudicator was required. In short, the government dug in its heels all the way to the end, and lost it all.”

The Justice Department did not immediately comment on the fee request.

Read Gibson Dunn's fee petition here:

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Perry told the D.C. Circuit that Gibson Dunn was seeking fees at the Equal Access to Justice Act's standard hourly rate of $125 plus a cost-of-living adjustment. The cost-of-living adjustment for the Washington area results in claimed hourly rates of $196.32 in 2015, $198.48 in 2016, $200.67 in 2017, and $204.34 in 2018.

Gibson Dunn's fee petition did not reveal the normal hourly rates of the partners and associates who worked on Lucia's case.

The total request amounts to $818,730.80 based on 4,075.4 hours of work. Perry and San Francisco-based partner Marc Fagel, co-chair of the firm's securities enforcement team, were the lead attorneys, billing for 496.6 hours and 105.8 hours, respectively. Eight associates also billed for their hours on the case. Overall, the firm said it dedicated 6,000 hours on Lucia's case since 2015, when the SEC administrative law judge ruled against him. The firm said it took Lucia's case to the D.C. Circuit, and beyond, pro bono.

Perry, co-chairman of the firm's appellate and Supreme Court practice, said in the fee petition that the claimed rate was “substantially lower than his normal billing rate for these services.” Indeed, the NLJ has reported that veteran Supreme Court practitioners generally bill at more than $1,000 an hour.

The total fees requested are significantly lower than fees charged in comparable Supreme Court litigation, Perry said in the petition.

 

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