Print Shortlink

Recovering Mandatory Attorney’s Fees under the Virginia Fraud Against Taxpayers Act

The topic of today’s post is the recovery of mandatory attorney’s fees under the Virginia Fraud Against Taxpayers Act in Virginia state court.  I find it interesting how many attorneys simply do not pay attention to maximizing the fee recovery under fee shifting statutes generally, although federal court practitioners tend to be a little more experienced in this area.  There is also a well-developed body of case law in the federal system dealing with attorney’s fee awards and the factors that courts consider in making an award; in Virginia state courts, there is considerably less guidance.  

In the Fourth Circuit the factors set forth in Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974) generally govern.  Those factors (i.e., time and labor required; the novelty and difficulty of the legal issues involved; the skill and experience required to handle the case; the opportunity costs from being precluded from other work; the time limitations imposed on the lawyer; the result obtained, the reputation and skill of the attorney, and so forth) have been applied many times over the years.      

Additionally, federal practitioners in the D.C. area have the Laffey Matrix which is compiled annually by the Department of Justice’s Civil Division.  Although it does not have the force of law, the Laffey Matrix does track the Uniform Price Index compiled by the Department of Labor for attorney’s fees.  The Laffey Matrix also seems to be gaining popularity each year, and it is applied widely in major metropolitan areas.   

In Virginia state courts, however, the case law is sparse on attorney fee awards, although there is some guidance.  In the Circuit Court for Fairfax County, I strongly suggest not following the fee petition suggested by the Fairfax County Bar, which is only two or three pages long.  To be fair, the fee petition recommended by the FBA is probably quite sufficient for collections matters, or domestic relations cases, but as long as large fee awards are possible, I suggest practitioners follow the Virginia Supreme Court’s guidance.

The Virginia Supreme Court has held that, in evaluating the evidence regarding the reasonableness of counsel fees, the fact
finder may consider, (1) the time and effort expended by the attorney, (2) the nature of the services rendered, (3) the complexity of the services, (4) the value of the services to the client, (5) the results obtained, (6) whether the fees incurred were consistent with those generally charged for similar services, and (7) whether the services were necessary and appropriate. See, Schlegel v. Bank of America, N.A.,  271 Va. 542, 556, 628 S.E.2d 362, 369 (2006).  In making an attorney’s fee award, the trial court will be reversed only for an abuse of discretion.  Tazewell Oil Co. v. United Virginia Bank, 243 Va. 94 (1992). 

It is important to remember that attorney’s fees are mandatory under the VFATA, and should be seen as a major portion of damages from the very start of the litigation.  Even an award of a single $5,000 penalty under the VFATA would entitled the plaintiff to mandatory attorney’s fees.  In litigation under the Virginia Freedom of Information Act (FOIA), the Virginia 
Supreme Court has upheld sizable awards of attorney’s fees.  See, RF & P Corp. v. Little,  247 Va. 309, 440 S.E.2d 908 (Va.1994).  In this case, the Virginia Supreme Court upheld the trial court’s award of $133,000 in attorneys fees for violations of Virginia’s FOIA statute, even where petitioner did not prevail on all counts in the initial ccomplaint. 

A party entitled to an award of attorney’s fees must establish a prima facie case that the fees requested are reasonable.  Chawla v.
BurgerBusters, Inc., 255 Va. 616, 623, 499 S.E.2d 829, 833 (1998).  I have attached /files/116785-109034/bruggemann_decla.pdf”>example.       

These declarations were for an FLSA case, and so you would generally want to get declarations from attorneys familiar with false claims litigation under the Federal False Claims Act or the Virginia Fraud Against Taxpayers Act.  However, such specialized knowledge is not necessary to support the hourly fee rate, as we see here.

There is more Virginia case law available, and we will revisit this topic from time to time. 

Zachary Kitts
Cook & Kitts, PLLC



Leave a Reply