In fee-shifting cases, it can be tempting to treat a post-judgment attorney’s fee demand or motion as an unpleasant but largely unavoidable addition to litigation. Especially after a hard-fought merits battle, defendants may wonder whether it is worth spending more time and money to challenge a fee request. The Ninth Circuit’s recent decision in United States ex rel. Thrower v. Academy Mortgage Corp. suggests the answer is — sometimes — yes.

Case Background

A quick look at the path of Thrower shows why. In 2016, Gwen Thrower, a former mortgage underwriter, sued Academy under the False Claims Act (the FCA), alleging the company falsely certified compliance with the Federal Housing Administration’s Direct Endorsement Program, which allows approved lenders to underwrite mortgages for government insurance. Thrower’s case almost died early: after reviewing the allegations, the government declined to intervene in the case. But Thrower and her lawyers, a small firm in New York, pressed forward and defeated not only Academy’s motion to dismiss but also a rare motion to dismiss filed by the government.

After years of discovery and litigation, the case ended in a sizable settlement: Academy agreed to pay $38.5 million to resolve the FCA claims, with more than $11 million paid to Thrower under the FCA’s qui tam provision. But the settlement left open the issue of statutory attorneys’ fees, leaving that issue for the court to decide and setting up a second major battle over how much...

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