Health Law Daily Wrap Up, FALSE CLAIMS ACT—N.D. Ga.: Relators win $1.9M fee fight after hospice parties seek reduction for unsuccessful claims, (Sep 28, 2026)

By Justin Marcus Smith, J.D.

The hospice parties advocated for a fee haircut to account for time spent on unsuccessful claims, but the court held “substantial relief” was what mattered, and the government had settled for $9.2 million in restitution.

The federal district court in Atlanta, Georgia, awarded more than $1.9 million in attorneys’ fees to relators’ attorneys in a decade-old qui tam action against a hospice provider after the government only recently intervened and settled a subset of the claims. The court held that a reduction of fees, based solely on a release of some claims, was unwarranted because the relators’ claims were intertwined. The court said the law was clear that settlement, which did not involve an admission of guilt nor a concession about the merits, would not affect fees where the relators’ cases ultimately led to substantial relief, $9.2 million in restitution for the government, without a full release of liability. Substantial delay in resolving the case justified awarding attorneys’ fees at present-day rates rather than historical rates. The court sorted through a variety of objections to attorney time records and found the objections largely unfounded. The consolidation of three complaints initially filed in different locales complicated the selection of a local rate. The court capped fee awards at $1,100 per hour, the rate of the most experienced attorney relator attorney based in the Atlanta area. Applying a local rate was the remedy for inability to justify unavailability of local counsel (U.S. ex rel. Luchtman v. Homestead Hospice, No. 1:15-cv-00840-TWT (N.D. Ga. Sept. 18, 2026)).

Background. In June 2025, the United States and the State of Georgia (collectively, the government) elected to intervene in this 2015 qui tam action. The action originally consisted of three complaints that invoked the False Claims Act and the Georgia False Medicaid Claims Act. The government settled as to certain claims. Thereafter, the court then entered a voluntary dismissal of remaining claims with prejudice pursuant to Fed. R. Civ. P. 41(a)(2). The relators specifically reserved their attorneys’ fees and costs. The court unsealed the complaint on dismissal.

On June 23, 2025, the relators moved for approximately $1.8 million in fees and $13,000 in expenses. The relators later requested supplemental fees for five attorneys. The hospice parties took issue with the time sheets on the ground that they did not identify billed tasks by claim. The hospice parties argued that was fatal to the fee request because the relators were only entitled to fees for work on claims under the “covered conduct” section of the parties’ settlement agreement, not for work toward any unsuccessful claims.

The hospice parties therefore advocated for an aggregate percentage haircut on the fees allowed to account for time spent on unsuccessful claims. They also contended office and travel expenses were not recoverable because there was no explanation of who incurred them or why. The hospice parties also questioned the basis for the requested hourly rates, especially with regard to the request to apply a present-day lodestar rate to all hours billed on a ten-year-old case.

The relators countered they were entitled to fees and expenses beyond the covered conduct in the settlement agreement because the government dismissed the suit without prejudice without reaching a decision about the merits of the relators’ claims. The relators said all claims were intertwined and the covered conduct section of the settlement agreement was broadly worded to encompass multiple forms of remuneration that the hospice allegedly gave to medical directors. The relators said it covered all complaint counts. The relators also said their billing and expense records were sufficiently detailed and the hourly rates requested were reasonable.

Substantial relief. The court agreed with the relators that a reduction of fees, based solely on a release of some claims, was unwarranted. All claims alleged that the hospice parties either provided unlawful kickbacks or paid illegal remuneration defrauding the Georgia and federal Medicare programs. The claims all involved core facts or were based on related legal theories.

Moreover, the parties all expressly agreed that the settlement was neither an admission of guilt nor a concession that the claims lacked merit. The court said the law was clear that settling would not weaken a fee claim. Whether the relators obtained “substantial relief” was what mattered, and here, the hospice parties agreed to pay $9.2 million in restitution to the government in exchange for less than a full release of liability. The court declined to reduce the claimed fees based on alleged limited success.

Time records. The court declined to discount the challenged time entries. The hospice parties’ conclusory assertions and arguments about the sufficiency of the relators’ time records primarily went to whether the court should discount the fee award for time spent on unsuccessful claims. The hospice parties’ challenges also lacked the “reasonable precision” demanded in the Eleventh Circuit, but the court addressed each.

The challenge that certain time records did not show the time spent on the different claims lacked merit. Stated tasks were not in question because they pertained to the case as a whole. The court did not find impermissible block billing because time entries reflected minute specificity with regard to subparts of tasks completed. Most entries were less than two-hour time increments. Others identified procedural and other issues. They did not lack specificity. They were not block-billed.

The challenge to a different law firm’s time records for 2014-2016 lacked the reasonable precision needed for a proper assessment. Again, the court said the time entries were specific to procedural issues, claims, and complaint editing. Task descriptions allowed the court to assess purpose. The court declined to discount these time entries.

Pertinent to the hospice parties’ third time sheet challenge, the court accepted the relators’ explanation that five entries noting “date approximate” had to do with transfer from a notepad. There is no prohibition on keeping records on a notepad and entering them into a computer later. In any event, a lack of contemporaneous records did not justify automatic reductions in hours claimed. A subset of other entries also did not show block billing. A criticism of excessive time spent did not point to any specific examples. Over six hours spent reviewing a complaint provided enough information about what the review was about. The time spent there was not unreasonable given the breadth of the action.

The court likewise declined to reduce a fourth set of time entries involving two law firms for block billing. Listing multiple aspects of a broader task, such as drafting the complaint, was not unreasonable. Other entries provided enough detail about the purpose of an email. About seven hours spent on review of patient records in a case this size did not seem unreasonable. Time spent on other emails likewise did not seem unreasonable.

Billed rates. The court found this case to be one where the delay in payment justified awarding attorneys’ fees at present-day rates rather than historical rates. Delay was undoubted. The court said the weight of case law counseled current rates. The hospice parties did not explain what reduction measure to use for a different measure to account for inflation and interest.

Next, the court declined to discount a non-local attorney’s rate based solely on his non-local status. Although he did not appear, apply for admission pro hac vice, or state his bar membership, Local Rule 83.1(B)(1) permits an attorney to seek fees without appearing pro hac vice if other attorneys within the firm have appeared, have been admitted pro hac vice, are regular members of the court bar, and are directing the work.

However, as to that law firm, the court said it agreed with the hospice parties that the evidence did not support the unavailability of non-local counsel to justify non-local rates. The remedy was to award fees at the local market rate. As to the appropriate local rate, the three underlying complaints complicated the analysis. One was filed in the Middle District of Georgia, another in the District of South Carolina. The filing venue was not dispositive here. The record showed little action taken in each individual case before settlement. The Supreme Court has promoted focusing on the significance of the over relief obtained in relation to hours reasonably expended. The court used the Atlanta area as the relevant market for the lodestar determination because the main action happened in the Atlanta division of the Northern District of Georgia after consolidation.

As for those hourly rates, the court capped fee awards at $1,100 per hour, the rate of the most experienced attorney relator attorney based in the Atlanta area. The court said it was itself an expert. Relying on its own knowledge, it noted a wide range of rates charged among the relators’ attorneys. The court did not find the higher of the fees justified in light of the dearth of evidence supporting the higher fee requests. The court addressed each fee reduction at length and prepared a chart showing the appropriate hourly rate for each attorney and support person requesting fees with a total lodestar figure for each.

Expenses, travel. The court held routine office overhead, as well as legal research costs, copying, postage, and courthouse parking fees are generally not recoverable. After addressing each expense and travel request per the affidavits filed, the court awarded relators’ counsel $7,186.92 in expenses, not the $13,000 requested.

Supplemental fees. The court also reviewed and found supplemental fees of $208, 597.50 and supplemental expenses of $1,833.23 to be reasonable.

The case is No. 1:15-cv-00840-TWT.

Judge: Thrash, T.

Attorneys: Akash Desai, Office of the U.S. Attorney, for the U.S.

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