12-002757RU 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. vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, August 1, 2016.

Summary: A $365,351 fee for unpromulgated rule challenge & $397,533.50 were reasonable. For junior lawyer hourly rate of $200 is reasonable; $425 reasonable for Sr. lawyer. If records do not have sufficient detail across-the-board reduction of hours is proper.

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 M EMORIAL

Petitioners,

vs. Case No. 12 - 2757RU

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

ORDER AWARDING FEES AND COSTS

Administrative Law Judge, John D.C. Newton, I I, 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

Donn a 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 Dr ive , 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 ISSUE S

( A) What is the amount of reasonable attorneyÓs fees and

taxable costs Respondent, Agency for Health C are 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 attorneyÓs fees the

Agency must pay Hospitals for appellate proceedings before the

First District Cou rt 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 a gainst the Agency with the

Division . The petition asse rted 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 Ð stabilization Ñ was a rule as

defined in section 120.52(16), Florid a 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 ÐstabilizationÑ standard. The Hospitals prevail ed.

The Final Order in this proceeding c oncluded:

[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 Hospital s were Ð entitled

to recover fees and costs in this action pursuant to section

120.595(4)(a).Ñ

The Agency appealed to the First District Court of Appeal.

After oral argument the Agency dismissed its appeal. The

courtÓs opinion allowing the Agency to dismiss its appeal

stated:

Here, the administrative law judge (ALJ)

found that AHCA was operating under an

unpromulgated rule whic h was not required by

the Federal Government. AHCA has sought to

voluntarily dismiss this courtÓs review of

that finding. Thus, the ALJÓs finding

entitles appellees to reasonable attorneyÓs

fees during the entire duration of these

proceedings. As such, we accept the

voluntary dismissal, but we grant appelleesÓ

motion for appellate attorneyÓs 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

David Ashburn, Esq uire. HospitalsÓ Exhibits 1 through 7, 10 and

11 were admitted in to evidence. The Agency presented the

testimony of its expert witness, M. Christopher Bryant, Esq uire .

AgencyÓs Exhibits 4 through 6 were admitted into evidence. The

parties requested and received additional time to file proposed

final orders. The part ies timely filed proposed final orders.

They have been considered in the preparation of this Order.

FINDING S OF FACT

Proceedings Before the Division of Administrative

Hearings and the First District Court of Appeal

1. In the beginning this was an acti on 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 Ð stabilization. Ñ The issue of whether the A gency could

apply the ÐstabilizationÑ 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 clai ms 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.

2. The Hospitals coll ectively engaged Duane Morris to

represent them in this proceeding challenging the AgencyÓs

stabilization standard as an unpromulgated rule. Joanne B.

Erde, Donna Stinson, and Harry Silver were the HospitalÓs

lawyers in this proceeding. Ms. Erde is an ex perienced 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. Silv er 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 HospitalsÓ

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 Ho spitalsÓ counsel

the advantage of preparing with level of detail before filing

the petition.

4. The engagement letters recognize this stating: ÐWe

have an understanding of the facts underlying this matter and

have substantial knowledge concerning the law governing the

issues in this case.Ñ This well - developed understanding of the

facts should have minimized the need for discovery and

preparation in this proceeding. Counsel were well positioned to

prosecute this matter efficiently. Likewise , c ounselÓs

Ð substantial knowledge concerning the law governing the issues

in this caseÑ 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 s ignificant 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 Ð stab ilization Ñ 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: ÐBecause

many hospitalsÓ interests in [sic] are similar or ide ntical 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.Ñ

6. Because of counselÓs 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

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. Th e 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

provid ed for monthly billing and payment from counselÓs 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 g roup 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 prepar ation

for a fees dispute.

10. An "unpromulgat ed 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 pu blic 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 Ót of Rev . v. Vanjaria Enter s. , 675 So. 2d 252

(Fla. 5th DCA 1996) ; and the cases those opinions cite.

1 2. The facts proving the ÐstabilizationÑ standard were

easy to establish. Many Agency documents stated the shift to

the ÐstabilizationÑ standard . Documents of Agency contractors

did also. Two examples of how clear it was that the Agency was

applying a new standard were the AgencyÓs statements in its

2009 - 2010 a nd 2010 - 2011 reports to the Governor on efforts to

control Medicaid fraud and abuse. The reports describe the

ÐstabilizationÑ standard as Ðmore stringentÑ and certain to

recover millions of dollars for the Agency.

13 . As the AgencyÓs reports to the Gov ernor indicate, the

stakes were high in this matter. For the Hospitals and other

hospitals collectively affected by the AgencyÓs effort to recoup

past payments by applying the ÐstabilizationÑ standard,

$400,000 ,0 00 was at stake.

14 . This matter did not p resent 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 Agenc yÓs failure to fully comply with the pre -

hearing instructions and unfounded Motion in Limine added some

additional time demands for the HospitalÓs 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 comm ence 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 grante d the

request. Thus the Hospitals had the time their counsel said

they needed to prepare for the hearing.

17. The appeal imposed no time constraints. Both parties

received extensions of t im e for their filings. Seventeen months

passed between filing t he 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 HospitalsÓ counselÓs billing records are

voluminous. For the proceeding before the Divis ion, the

Ho spital s Ó counselÓs 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 lawyerÓs activities

for a period of time, usually a day, are clumped together with

one time total for the entire dayÓs 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 invoic e does not establish which activity took how much

time.

20 . Here are representative examples of the block billing

entries from the Division level invoices:

August 20, 2012 (Erde) Î Conference call with ALJ; telephone

conference with AHCA attorney; telepho ne conference with

newspaper reporters Î 2.0 hours

September 16, 2012 (Erde) Î Review depositions; prepare opening

remarks; develop impeachment testimony Î 5.50

September 27, 2012 (Erde) Î Intra - office conference; finalize

interrogatories; work on direct Î 8.50

October 2, 2012 (Stinson) Î 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) Î Intra - office conference to discuss

proposed order; Res earch Re: other OIG audits; research on

validity of agency rules Î 2.10 hours

November 9, 2012 (Erde) Î Conference with ALJ; Intra - Office

conference to discuss status; further drafting of proposed order

Î 7.70 hours.

November 19, 2012 (Stinson) Î Final Rev iew and Revisions to

Proposed Final order; Telephone conferences with Joanne Erde to

Review final Changes and comments; Review AHCAÓs proposed orde r

and revised proposed order Î 3 . 2 0 hours.

21. Many of the entries, block or individual, do not

provide suf ficient detail to judge the reasonableness of the

time reported. ÐPrepare for deposition and hearing,Ñ Ðreview

depositions ,Ñ Ðreview new documents,Ñ Ðreview draft documents,Ñ

Ðintra - office conferenceÑ and Ðattention to discoveryÑ are

recurrent examples.

2 2 . 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 HospitalsÓ 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,

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. T his is not reasonable.

23 . A reasonable number of hours for the proce edings

before the Division is 180. That is the equivalent of 22 .5

eight - hour days. That is sufficient to han dle th e matter before

the Division from start to finish. The number i ncludes

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 fee s 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

(Ó13) Joanne B. Erde 202.80 hours $580.00 $117,624.00

(Ó14) Donna Stinson 88.50 hours $460.00 $40,710.00

(Ó13) Donna Stinson 67.10 hours $500.00 $33,550.00

(Ó14) W.D. Zaffuto 48.30 hours $435.00 $21,010.50

Rob Peccola 10.90 hours $275.00 $2,997.50

(Ó13) Rob Peccola 17.50 hours $300.00 $5,250.00

(Ó14) L. Rodriguez - 6.20 hours $520.00 $3,224.00

Taseff

(Ó13) L. Rodrigue z - 19.50 hours $545.00 $10,627.50

Taseff

(Ó14) 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 b y six lawyers. Here are representative examples from the

appellate level invoices:

May 16, 2013 (Erde) Î Reviewed AHCAÓs initial brief; intra -

office conference to discuss; preliminary review of record Î

2.90

May 24, 2013 (Erde) Î Intra - office conference t o discuss

response to brief; preparation to respond to brief Î 2.50

May 30, 2013 (Erde) Î Attention to Appeal issue s ; finalize

request for extension; brief research re jurisdictional issues Î

1.60

June 18, 2013 (Peccola) Î Strategy with J. Erde regarding

r esearch 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 Î 2.00

July 19, 2013 (Zaffuto) Î Revise/draft Answer Brief; dis cuss

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; instruction s

to assistant regarding edits and filing of answer brief and

appendi x prepare answer brief for filing ; call to clerk

regarding extension of time review initial brief by AHCA and

final order by ALJ Î 5.50

August 14, 2013 (Erde) Î Intra - office conference to discuss

brief; further revised brief Î 5.80

August 15, 2013 (Stinson ) Reviewed appellees' answer brief;

discussed language in answer brief with Joanne Erde Î 2.50

October 9, 2013 (Stinson) Î Review draft motion to relinquish

regarding admission of exhibit; exchange e - mails with Joanne

Erde; telephone conference with Joanne Erde Î 1.60

October 10, 2013 (Erde) Î Attention to new motion re

relinquishing jurisdiction; review of revisions; further

revisions Î 6.00

October 30, 2013 (Erde) Î Research re: AHCAÓs current behavior;

intra - office conference to discuss status of action at DOAH -

.70

November 7, 2013 (Peccola) Î Strategy with J. Erde regarding

Appell eesÓ response in opposition to A ppellantÓs motion for

supplemental briefing; conduct research regarding same; draft

same; look up 1 st DCA local rule on appellate motions and e mail

same to J. Erde Î 3.60

December 5, 2013 (Erde) Î Research Re: supplemental briefing

issues; research to find old emails from AHCA re: inability to

produce witnesses - .90

January 21, 2014 (Rodriguez - T aseff) Î Working on Supplemental

Answer Brief Î lega l argument re authentication and cases

distinguishing marchines [sic] ; editing facts Î 6.70

February 3, 2014 (Erde) Î Review and revise response to motion

for further briefing; intra - office conference to discuss same Î

2.20

May 2, 2014 (Pontikes) Î Continu e 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 Î 5.00

June 5, 2014 (Erde) Î draft email to group regarding AHCAÓs

set tlement offer; reviewed supplemental settlement offer from

AHCA; draft email to group re same Î 1.70

June 11, 2014 (Erde) Î Attention to finalizing response to

AHCAÓs notice of dismissal and fi li ng of fee petition; memo to

members of group Î 8.00

July 21, 2014 (Erde) Î 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 Î 6.90

July 21, 2014 (Peccola) Î St rategy 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: Ð begin preparation to respond to AHCAÑs brief,Ñ Ðattention

to appeal issues,Ñ Ðpreparation to draft answer brief,Ñ and

Ðresearch and draft answer brief.Ñ

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 appa rent result is

those lawyers spending more time on issues than the more

experienced Ms. Erde and Ms. Stinson would.

2 8 . One example of this is a July 19, 2013, billing entry

where a lawyer spent time researching Ðappellate rules regarding

extension of t ime and staying proceedings pending ruling on

motion.Ñ 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 reco llection of the rules, something that would

probably take less time than it took to make the time entry and

review the draft bill.

29. HospitalsÓ a lso 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 courtÓs order awarding them fees and costs.

The courtÓs opinion and the Final Order stated that fees and

costs were awarded under section 120.595(4)(a), Florida

Statutes. Yet the Hospi talsÓ 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 pr oceeding is

generally more time - consuming because of discovery, a hearing

much longer than an oral arg ument, witness preparation, document

review , and preparing a proposed order .

3 1 . The second is the shee r number of hours. HospitalsÓ

counsel seeks payment for 754.10 hours in the appellate

proceeding. This is 66.3 more t han for the Division proceeding.

It included a two day hearing, trial preparation, research, and

preparing a 37 page proposed final ord er . 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.

3 2 . Of this time, 613.5 hours were spent by Ms. Erde and

Ms. Stinson, lawyers with exper tise 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

man y hours , or a few more hours , than the administrative

proceeding. It is t he AgencyÓs disputatious conduct over a

scrivenerÓs error in the Final Order which erroneously stated

that the AgencyÓs Exhibit 1 had been admitted . The AgencyÓs

condu ct increased the time needed to represent the Hospitals in

the appeal.

3 4 . 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 AgencyÓs

a nd the HospitalsÓ proposed final order s correctly stated that

Agency Exhibit 1 had not been admitted.

3 5 . The HospitalsÓ Answer Brief noted that Agency

Exhibit 1 had not been admitted. The transcript of the final

hearing and both partiesÓ proposed fi nal orders were clear that

the exhibit had not been admitted. Yet the Agency argued in its

Reply Brief that it had been.

3 6 . 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 d etermining the reasonable number of hours for

handling the appeal.

3 7 . A reasonable number of hou rs for handling the appeal

is 225 . Converted to eight - hour days, this would be 2 8. 13 days.

38 . For the appeal, Duane Morris attributes 28.4 hours of

the work to a junior lawyer. This is 3.8 per cent of the total

time claimed. Applying that percentage to 225 hours, results in

8 . 6 hours attributed to the junior lawyer with the remaining

216.45 hours attributed to senior lawyers.

Attorneys and Fees

3 9 . Ea ch party presented expert testimony on the issues of

reasonable hours and reasonable fees. The Agency presented the

testimony of M. Christopher Bryant , Esq uire . The Hospitals

presented the testimony of David Ashburn, Esq uire .

40 . As is so often the cas e with warring experts , the

testimony of the witnesse s conflict s 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 w as $ 200 per hour.

Mr. Ashburn opined that the reasonable hourly rate for senior

lawyers ranged between $595 and $700 and the reasona ble rate for

junior lawyers was between $275 and $300 .

4 1 . The contrast was the same for the opinions on the

reasonable n umber 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 Ó claimed 687 hours for the

proceeding before the Division and 754.10 hour for the appellate

proceeding were reasonable.

4 2 . The Hospitals argue that somehow practicing in a large

national law firm, like Duane Morris justifies a higher rate.

The theory i s 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 ef ficient lawyering that justifies a higher

rate.

4 3 . Based upon the evid ence presented in this record, a

reasonable rate for the senior lawyers participating in this

matter is $4 25 per hour. A reasonable rate for the junior

lawyer participating in this m atter is $200.00.

Fee Amounts

4 4 . A reasonable fee amount for representation in the

proceeding before the Division o f Administrative Hearings is

$7 6 , 5 00. A reasonable fee amount for the proceeding before the

First District Court of Appeal is $ 9 3 , 70 1.25 .

Costs

4 5 . Hospitals seek $6,333.63 in costs. The evidence

prov es these costs are reasonable. The Agency does not dispute

them.

CONCLUSIONS OF LAW

Jurisdiction

4 6 . 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

4 7 . Florida Patient's Compensation Fund v. Rowe , 472 So.

2d 1145 (Fla. 1985), as modified by Standard Guaranty Insurance

Com pany 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).

4 8 . The party seeking fees must prove that the fees

claimed and the time for which they seek payment are reasonable.

See Ci ty of Miami v . Harris , 490 So. 2d 69 (Fla. 3d DCA 1985).

The evidence must be sufficient to show what services were

per formed. See Warner v. Warner , 692 So. 2d 266, 268 (Fla. 5 th

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. 2 d DCA 2009).

4 9 . 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)(Ð A detailed record must provide enough

information to allow the Court to evaluate reasonableness; an

entry like ÒresearchÓ or ÒconferenceÓ without a de scription of

the subject will not do.Ñ ) M any of the invoice descriptions of

work performed do not provide sufficient detail.

50 . Where fee documentation is voluminous, like h ere, a

court may make an across - the - board reduction in hours. Kenny A.

v. Per due , 532 F.3d 1209, 1220 (11th Cir. 2008) . 3 / See also ,

Loranger v. Stierheim , 10 F.3d 776, 78 3 (11th Cir. 1994)

(Ð[A]cross - the - board percentage cuts in the number of hours

claimed or in the final lodestar figureÑ may be an appropriate

utilitarian approach ) . An a cross - the - board reduction in hours

is the practical approach in this case.

5 1 . 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, 1 304

(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

provided. Loranger v. Stierheim , 10 F.3d 776, 781 (11th Cir.

19 94), citing Norman , 836 F.2d at 1303.

5 2 . 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 - 1 9 (Fla. 3d DCA 1997).

5 3 . 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

5 4 . 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) ( d iscussing Rowe factors in estate case).

5 5. The eight factors of Rule 4 - 1.5(b) of the Florida Bar

Rules of Professional C onduct and an evaluation of each in lig ht

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

perfor m the legal service properly - Î This matter did not present

a novel or difficult question. The govern ing law is well

established, and the evidence needed was readily available. It

did not require e xtensive time and labor. Ms. Erde and

Ms. Stinson provided an above - average level of experience and

skill . The $4 25 hourly rate reflects that .

(B) The like lihood, if apparent to the client, that the

acceptance of the particular employment will preclude other

employment by the lawyer Î - R epresenting 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 loca lity for

similar legal services - Î Expert testimony was presented and

considered. The persuasive credible evidence established that

the customary fee for similar legal services in the community

where challe nges to unpromulgated rules must be litigated is

$4 25 per hour for senior lawyers and $200 per hour for junior

lawyers.

(D) The amount in volved and the results obtained - Î The

amount potentially involved was $400,000,000. The result was

success.

5 6 . After consideration of all the Rowe factors, the

reasonable fee for representation in the proce eding before the

Division is $7 6 , 5 00. After consideration of all the Rowe

factors, the reasonable fee for representation in the appellate

proceedings is $ 9 3 , 711 .25 .

Costs

5 7 . 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.

ORDER

Based upon the for egoing Findings of Fact and Conclusions

of Law, it is ORDERED that the amount of a ttorneyÓs fees

assessed against the Agency for Health Care Administration is

$1 70,2 1 1.25 . 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 $ 1 76,5 4 4.88 , 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. NE WTON, 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 Adminis trative Hearings

this 1st day of August , 2016 .

ENDNOTE S

1 / All citations to Florida Statutes are to the 2012 compilation

unless noted otherwise.

2 / ÐIt is simply not conceivable to us that the ablest of

lawyers, having covered the same ground in arg uments 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.Ñ See GrendelÓs 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 - 33 82 (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 Procedur e 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 Colum bia Dr ive , Suite C101

West Palm Beach, Florida 33409

(eServed)

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 Administ ration

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 He alth 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

Stat utes. 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 re ndition 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 o r as otherwise provided by law.