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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division

 THE NATIONAL ORGANIZATION FOR ) MARRIAGE, INC. ) ) Plaintiff, ) ) v. ) Civil Action No. 13-1225-JCC-IDD ) THE UNITED STATES OF AMERICA, ) ) Defendant. )  ___________________________________________ )

UNITED STATES OF AMERICA’S RESPONSE IN OPPOSITION TO PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES

Despite losing all the significant issues in this case and settling a damages claim of hundreds of thousands of dollars for $50,000, the National Organization for Marriage, Inc. (“NOM”) now seeks over $691,000 in attorneys’ fees. The Court should deny NOM’s motion in its entirety. The Court need not delve into NOM’s massive bills and complex algorithms to determine a reasonable attorney fee, because NOM is not the “prevailing party” — either with respect to the amount in controversy or the most significant issue pled. Regarding the amount in controversy, NOM has cherry picked the actual damages it was claiming during the course of this suit and, in fact, received less than half of what it was claiming when all amounts are properly considered. Also, NOM’s view of the most significant issue is belied by the face of its sworn Verified Complaint. Under both analyses, therefore, NOM is not a prevailing party. The Court’s analysis should end there — NOM is not entitled to any attorneys’ fees. The United States was also “substantially justified” in defending this case, which included debunking claims of governmental conspiracy and gross negligence. NOM’s Verified Complaint

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2 alleged a willful disclosure of its tax return stemming from such a conspiracy or one that resulted from gross negligence, which, if proven at trial, would have subjected the United States to punitive damages. As long as NOM pursued those baseless claims, the government, which admitted an inadvertent disclosure in its Answer, was obligated to zealously represent its client and defend the suit. Two weeks after the Court dismissed those claims upon the government’s summary judgment motion, the United States settled the remaining actual damages issue — an amount that NOM changed significantly during the course of discovery. These acts are the epitome of a reasonable defense in the face of an over-pled and unproven complaint. But even assuming,

arguendo

, that the Court were to determine that (a) NOM was the  prevailing party, and (b) the United States was not substantially justified in defending this suit,  NOM’s fee request is deficient in several respects. First, NOM incorrectly uses the Vienna Metro Matrix to determine a reasonable hourly fee for its seven timekeepers; federal law provides for a statutory cap on an attorneys’ hourly rate in such suits against the government. Second, the very request for over $691,000 in fees in order to collect a $50,000 settlement is facially unreasonable. There are also other deficiencies in NOM’s request, including the fact that counsel spent

over a year 

  preparing for, researching and drafting its Verified Complaint. Thus, if the Court were to even reach the issue of whether NOM’s fee request is reasonable, which it should not, the Court should significantly reduce NOM’s request and award it minimal fees.

FACTS

 Disclosure / Inspection Claims

On October 3, 2013, NOM filed this suit against the United States, seeking damages for the IRS’ wrongful inspection and disclosure of NOM’s amended 2008 Form 990, Schedule B (“2008

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3 Schedule B”) to a third party. [Dkt. 1]. The Schedule B identifies the names, addresses, and donation amounts of NOM’s major donors. While federal law requires the IRS to provide a copy of a 501(c)(4)’s Form 990 to the public upon request, it is also required to redact the names and addresses of the organization’s donors before complying with that request.

See, e.g.

,

 

26 U.S.C. § 6104(b). Here, an IRS clerk mistakenly neglected to redact NOM’s 2008 Schedule B before the IRS sent it to a third-party requestor. [Dkt. 79 at 11.] Accordingly, the government admitted in its Answer that the IRS

inadvertently

 disclosed one unredacted copy of the 2008 Schedule B to that single third party-requestor, entitling NOM to $1,000 in statutory damages. [Dkt. 33 ¶ 78,

et seq.

, filed on Dec. 2, 2013.] Two weeks later, on December 17, 2013, the United States, pursuant to Fed. R. Civ. P. 68, made an offer of judgment to NOM for $1,000, plus costs of the action to date — the statutory damages limit under federal law.

See

 26 U.S.C. § 7431(c). NOM rejected that offer and elected to continue pursuing this case. [Dkt. 91 ¶ 5.]  NOM’s Verified Complaint wrongly alleged, among other things, that: (1) the disclosure of the 2008 Schedule B was intentional and willful; (2) it was made to NOM’s ideological opponent, the Human Rights Campaign (“HRC”); and, (3) it was part of some ill-defined conspiracy against NOM. [Dkt. 1 at 14]; [Dkt. 68-2 at Resps. #1, 6, 7, 9.] Alternatively, NOM alleged that the disclosure was the result of “gross negligence,” and that the “inspection” (

i.e.

 the IRS’ review) of the tax return was also unlawful and done willfully or as the result of gross negligence. [Dkt. 68-2 at Resps. #1, 6, 7, 9.]  NOM never sought to amend its Verified Complaint during its suit. The complaint itself contained two counts: one alleging a willful or grossly negligent unauthorized disclosure, and another alleging

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