Apr 142026

Ninth Circuit Rejects $8.5M Award Of Attorneys’ Fees to FCA Whistleblower

Jaime L.M. Jones and Naomi A. Igra

The U.S. Court of Appeals for the Ninth Circuit issued a decision that reenforces the high bar for an award of attorneys’ fees above the lodestar amount in an FCA case. In United States ex rel. Thrower v. Academy Mortgage Corp., No. 24-4103 (9th Cir. Apr. 6, 2026), the Ninth Circuit reversed and remanded an order awarding more than $8.5M in attorneys’ fees in a case that resulted in a substantial settlement after the relator defeated not only the defendant’s motion to dismiss but also a rare motion to dismiss that the Government filed on its own behalf.  The decision confirms that an award of attorneys’ fees over the lodestar amount must be supported by specific evidence, even if the relator obtained an exceptional result.

The FCA mandates an award of reasonable attorneys’ fee to a successful relator.  Under the lodestar method, district courts calculate the award by multiplying the hours an attorney reasonably expended on a case by a reasonable hourly rate. Then, the court can modify the amount up or down based on factors that are not already part of the lodestar calculation. The Supreme Court has cautioned that lodestar modifications are for “rare” and “exceptional” circumstances. Perdue v. Kenny A. ex. rel. Winn, 559 U.S. 542, 551-552 (2010).

In Academy Mortgage, the district court found that the relator had achieved an exceptional result by overcoming the Government’s own motion to dismiss in a rare, if not unprecedented case. It also found that the result was attributable to an extensive investigation that showed the alleged fraud was more pervasive than the Government’s own investigation suggested. It concluded that these factors justified a 1.75 multiplier over its base calculation.

Although the Ninth Circuit acknowledged that district courts may apply a multiplier in an exceptional case, it held that the district court had not justified the modification with specific evidence.  In particular, it explained that superior results might justify an upward modification where the lodestar figure does not already capture an attorney’s superior performance.  It cited the Supreme Court’s examples in Perdue, including when the lodestar hourly rate is below an attorney’s true market value; the litigation required an extraordinary outlay of expenses or was protracted; or payment was unusually delayed.  None of those circumstances were present in Academy Mortgage.  Also, the Court found that the lodestar method takes into account extensive investigative work as part of the reasonable hours determination.  Ultimately, the Ninth Circuit did not dispute that relator’s attorneys achieved an exceptional result through an extensive investigation, but held that the trial court abused its discretion by applying a 1.75 multiplier without specific evidence that the lodestar calculation undervalued their work.

Judge Smith wrote separately, concurring in part and dissenting in part.  Although he agreed with the majority’s articulation of the legal standards, he found that the district court did not rely on subsumed factors when it determined that an enhancement was warranted.  He considered a modification justified but found the particular multiplier the district court applied was not supported by a sufficiently specific explanation.

A copy of the Ninth Circuit’s opinion is available here.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Jaime L.M. Jones

Chicago

jaime.jones@sidley.com

Naomi A. Igra

San Francisco

naomi.igra@sidley.com

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