Consolidated Edison Co. of New York, Inc. v. Bodman

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 13, 2006 Decided April 21, 2006

No. 05-5089

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., ET AL.,

APPELLANTS

V.

SAMUEL W. BODMAN,

SECRETARY OF ENERGY, UNITED STATES AND

GEORGE B. BREZNAY, DIRECTOR, OFFICE OF HEARINGS AND

APPEALS OF U.S. DEPARTMENT OF ENERGY,

APPELLEES

Consolidated with

05-5090 and 05-5223

No. 05-7009

PHILIP P. KALODNER,

APPELLANT

V.

PUBLIC SERVICE ELECTRIC & GAS COMPANY, ET AL.,

APPELLEES

2

Appeal from the United States District Court

for the District of Columbia

(No. 03cv01991)

(No. 05cv00024)

(No. 04cv00152)

Philip P. Kalodner, appearing pro se in Nos. 05-5090 and

05-7009 and on behalf of Consolidated Edison Company of

New York, Inc., et al. in Nos. 05-5089 and 05-5223, argued

the cause and filed the briefs for appellants/cross-appellees.

In Nos. 05-5089, 05-5090, and 05-5223, William G.

Kanter, Deputy Director, U.S. Department of Justice, argued

the cause for appellees/cross-appellants. With him on the

briefs were Peter D. Keisler, Assistant Attorney General,

Kenneth L. Wainstein, U.S. Attorney, and Edward

Himmelfarb, Attorney. Stephen C. Skubel and Thomas H.

Kemp, Attorneys, U.S. Department of Energy, entered

appearances.

In No. 05-7009, Michael F. Healy argued the cause for

appellees Public Service Electric & Gas Company, et al. With

him on the brief were Thomas A. Schmutz and Brooke Clagett.

Also in No. 05-7009, David F. Smith argued the cause for

appellees General Council on Finance and Administration of

the United Methodist Church, et al. With him on the brief

was Stanley O. Sher.

Before: SENTELLE, Circuit Judge, and EDWARDS and

WILLIAMS, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

3

WILLIAMS, Senior Circuit Judge: For eight years (from

1973 to 1981) the government imposed price controls on the

sale of crude oil. In and since that period, it has collected

refunds from the suppliers whose prices exceeded the ceilings

and has distributed the proceeds to persons and firms that paid

supra-ceiling prices. Indeed, the process of distributing

refunds continues to this day. The statutory authority

underlying these efforts appears in the Emergency Petroleum

Allocation Act of 1973, Pub. L. No. 93-159, 87 Stat. 627

(1973) (“EPAA”), incorporating the Economic Stabilization

Act Amendments of 1971, Pub. L. No. 92-10, 85 Stat. 743

(1971) (“ESA”). We deal here with claims for attorneys’ fees

for litigation undertaken by Philip P. Kalodner in connection

with the distribution.

For roughly two decades, Kalodner has represented a

group of six electric utility companies and three paper

manufacturers (collectively, the “clients”) in their quests to

obtain crude oil pricing refunds. On behalf of himself and his

clients, he invokes the “common fund” theory to support

claims for legal fees, making claims against both the

government and many of the refund beneficiaries who were

not his clients. The common funds, he claims, arose out of

alleged legal victories in two cases, known here as Con Ed IV

(more formally, Consolidated Edison Co. of New York v.

Abraham, 271 F. Supp. 2d 104 (D.D.C. 2003)), and Con Ed V

(more formally, Consolidated Edison Co. of New York v.

Abraham, No. 03-1991 (D.D.C. June 30, 2004)). Although

the amounts at stake keep shifting for a variety of reasons,

Con Ed IV involves about $264 million, Con Ed V about $35

4

million (which may overlap with the $264 million).1 We

have, then, two sets of claimants (Kalodner and his clients),

two sets of possible fee payers (the government and the

beneficiaries), and two alleged legal “wins” (Con Ed IV and

Con Ed V). Because of the complexity we provide a

scorecard:

Table 1: An Overview of the Claims

Fee Applicant:

Clients Kalodner Kalodner

Against Against Against

Government Government Beneficiaries

Seeking fee 1. 3. 5.

for District court District court District court

Con Ed IV denies; we reverse denies; we denies; we

($264MM) and remand. affirm. reverse and

(2004 Motion) (2005 lawsuit) remand.

(2004 lawsuit)

Seeking fee 2. 4. 6.

for District court District court District court

Con Ed V grants; we reverse. denies; we denies; we

($35MM) (2004 Motion) affirm. affirm.

(2005 lawsuit) (2004 lawsuit)

1

See Notice of Final Procedures for Distribution of

Remaining Crude Oil Overcharge Refunds, 69 Fed. Reg. 29,300,

29,301 (May 21, 2004). We use these numbers only to give an idea

of the magnitudes; in the event that any fees are awarded, sorting

out the amounts, and the degree to which they are attributable to the

one court decision left standing as conceivably justifying a fee

(Con Ed IV), will not be simple.

5

The fee claims under review were asserted in a motion in

Con Ed V and in two separate lawsuits. Specifically, the

claims against the government took the form of (1) a motion

in 2004 in Con Ed V on behalf of Kalodner’s clients for fees

in winning the alleged victories in both cases (claims 1 & 2 in

Table 1), and (2) a separate lawsuit in 2005 on behalf of

Kalodner himself, again for both alleged victories (claims 3 &

4 in Table 1). In each the clients and Kalodner sought a fee of

10% of the final distribution. In a consolidated opinion, the

district court rejected Kalodner’s claims (against the

government) with respect to both Con Ed IV and Con Ed V,

reasoning primarily that the partial waiver of sovereign

immunity provided by the Equal Access to Justice Act, 28

U.S.C. § 2412(b) (“EAJA”), runs in favor only of parties, not

their lawyers. See Mem. Op. at 6 (D.D.C. Jan. 26, 2005)

(“Consolidated Mem. Op.”), filed in both Con Ed V and

Kalodner v. Abraham, No. 05-0024 (D.D.C. Jan. 26, 2005)

(“Kalodner-Abraham”). Kalodner appeals (Kalodner v.

Abraham appears sub nom. Kalodner v. Bodman, No. 05-

5090),2 and we affirm (thus rejecting claims 3 & 4 in Table 1).

In the same opinion the court also rejected the clients’

claims against the government with respect to Con Ed IV

(claims 1 & 2 in Table 1). Consolidated Mem. Op. at 5-6. In

doing so it said it was applying the law-of-the-case doctrine,

citing its own prior decision finding the fees claim barred by

sovereign immunity. See Order, Con Ed IV (Dec. 4, 2003)

(the “Dec. 4, 2003 Order”), aff’d, Consolidated Edison Co. of

New York v. Abraham, No. 04-1141 (Fed. Cir. June 14, 2004).

2

Kalodner simultaneously appealed to the Federal Circuit as

No. 05-1310, which that circuit deferred pending decisions here.

See Order (Fed. Cir. May 31, 2005).

6

(The district court later characterized the second motion for

fees for work in Con Ed IV as “an improper collateral attack

on the decision of the Federal Circuit.” Consolidated Mem.

Op at 11, thus invoking issue and/or claim preclusion, which

appear, given the Federal Circuit’s affirmance of the court’s

earlier decision, to be the most apt doctrines.) But the court

accepted the clients’ claims for their lawyer’s supposed

contribution in Con Ed V, and awarded a fee of 30% of the

roughly $35 million there at stake. See Consolidated Mem.

Op. at 9-11. (We have discovered no request by Kalodner in

these cases for more than 10%.) The clients appeal as to

Con Ed IV (our No. 05-5089), and the government cross-

appeals as to Con Ed V (our No. 05-5223).3 We reverse and

remand the judgment against the clients as to Con Ed IV,

because Kalodner’s efforts in that case may have satisfied the

causal requirements for a common fund recovery. (The

government having failed to argue issue or claim preclusion,

we express no opinion on those defenses.) We reverse the

judgment in favor of the clients as to Con Ed V, because it is

clear that that lawsuit failed to yield any court-ordered relief

and more generally played no material role in the successes

claimed.

In the second independent lawsuit, Kalodner brought

claims on his own behalf (not for the clients) against refund

beneficiaries in 2004 (claims 5 & 6 in Table 1), again seeking

10% of the total recovery. The district court resolved the

claims against him, Kalodner v. Public Service Electric &

3

The clients simultaneously appealed to the Federal Circuit as

No. 05-1309, and DOE cross-appealed there as No. 05-1450. The

Federal Circuit entered an order deferring consideration of these

parallel appeals. See Order (Fed. Cir. June 17, 2005).

7

Gas, No. 04-152 (D.D.C. Dec. 20, 2004) (“Kalodner-Public

Service”), and he appeals (our No. 05-7009).4 We reverse that

decision in part and remand, finding that Kalodner may be

able to show that his activity in Con Ed IV played a sufficient

role to justify a fee recovery; we also affirm in part, as the

record makes clear that there was no such victory in Con

Ed V.

We note by way of background that the common fund

theory conventionally rests on a theory that beneficiaries of

the lawsuit would be unjustly enriched if not compelled to pay

a share of the fees that made success possible. See, e.g.,

Swedish Hospital v. Shalala, 1 F.3d 1261, 1265 (D.C. Cir.

1993). It may well be that courts have found it sensible to

apply the unjust enrichment principle here (after all, human

life abounds in windfalls) because doing so answers a

potential free-rider problem. See Wal-Mart Stores Health &

Welfare Plan v. Wells, 213 F.3d 398, 402 (7th Cir. 2000)

(noting that free riding on attorney’s efforts would be

“contrary to the equitable concept of ‘common fund’”); cf.

United States v. Tobias, 935 F.2d 666, 668 (4th Cir. 1991)

(“Generally, a fund claimant who is represented by

counsel . . . is deemed not to have taken a ‘free ride’ on the

efforts of another’s counsel.”); John P. Dawson, Lawyers and

Involuntary Clients: Attorney Fees from Funds, 87 HARV. L.

REV. 1597, 1647-51 (1974) (discussing incentives to free ride

on attorneys’ efforts). If lawyers considering representation

of some but not all of a cluster of beneficiaries can recover

compensation only from beneficiaries who actively retain

4

Kalodner simultaneously appealed to the Federal Circuit as

No. 05-1214, which the circuit deferred pending decisions here.

See Order (Fed. Cir. Mar. 25, 2005).

8

them, claims will not be brought—even though meritorious—

where the expected value of the gains for beneficiaries willing

to participate can’t generate adequate compensation for

counsel (and thus enable the bringing of suit). Under a rule

awarding fees out of litigation proceeds received by passive

beneficiaries, lawyers’ anticipation of fee recoveries will

provide the requisite incentive. In some cases, of course, a

subset of potential beneficiaries will have stakes large enough

to call forth ample litigation effort; if so, the free-rider

concern declines, possibly to nil. This last point would be

pertinent, if at all, in calculation of fees.

* * *

The history preceding these cases is a long and tortured

one, recounted in bits and pieces elsewhere. See Kalodner v.

Abraham, 310 F.3d 767 (D.C. Cir. 2002) (“Kalodner I”);

Consolidated Edison Co. of New York v. Abraham, 303 F.3d

1310 (Fed. Cir. 2002); Consolidated Edison Co. of New York

v. Ashcroft, 286 F.3d 600 (D.C. Cir. 2002); Consolidated

Edison Co. of New York v. Richardson, 233 F.3d 1376 (Fed.

Cir. 2000) (“Con Ed III”); Kalodner v. Abraham, 309 F. Supp.

2d 100 (D.D.C. 2004); Con Ed IV; Consolidated Edison Co.

of New York v. O’Leary, 4 Energy Management (CCH)

¶ 26,698 (D.D.C. 1996), aff’d, 117 F.3d 538 (Fed. Cir. 1997)

(“Con Ed II”); Consolidated Edison Co. v. Herrington, 752 F.

Supp. 1082 (D.D.C. 1990). For our purposes, it suffices to

summarize only the bare background facts.

The statutes mentioned at the outset empowered the

Department of Energy (“DOE”) to recover overcharges in

violation of the price controls, and it has done so to the tune of

several billion dollars. As part of a settlement in a multi-

9

district litigation, In re Department of Energy Stripper Well

Exemption Litigation, 653 F. Supp. 108 (D. Kan. 1986)

(“Stripper Well”), DOE authorized its Office of Hearings and

Appeals (“OHA”) to begin distributions of this money to

parties who had paid supra-ceiling prices. DOE placed 20%

of the remaining crude oil overcharge funds into escrow for

potential distribution to private firms and persons that were

not parties to the settlement, leaving the remaining 80% to be

split between federal and state governments. See Statement of

Modified Restitutionary Policy in Crude Oil Cases, 51 Fed.

Reg. 27,899 (Aug. 4, 1986). Since then, OHA has processed

over 100,000 claims, and in two rounds of distributions has

paid out roughly $610 million to private beneficiaries (as

opposed to governments). See Con Ed IV, 271 F. Supp. 2d at

106-07. The cases here concern the distribution of roughly

$280 million remaining in escrow at the date of oral argument.

Kalodner’s clients will cumulatively receive up to 15% of

all crude oil refunds to private parties. The clients have

compensated him for his services, but he and the clients now

seek a common fund fee of approximately $27 million out of

the sums paid or to be paid to many of the roughly 56,000

other refund recipients (past or future). We say “many”

because the fee claimants have evidently chosen not to pursue

parties receiving relatively small amounts, as well as about 30

beneficiaries with whom Kalodner has fee agreements.

(Although in all instances the fees would in economic reality

be paid by the beneficiaries, we distinguish (as does the law)

between claims made against the government and ones made

against beneficiaries.)

Kalodner and his clients assert that his civil litigation in

Con Ed IV and Con Ed V preserved and increased the

remaining final distribution for the benefit of the whole class.

10

In Con Ed IV, they claim, Kalodner created or preserved a

common fund (now amounting to about $280 million) by

securing a declaratory judgment that the government

distribute all remaining amounts of money in the 20% reserve

for private parties. There his clients had moved for partial

summary judgment on prayers for relief (1) that the fund be

expanded beyond the 20% reserve, (2) that certain proceeds

from a settlement agreement be included in the 20% reserve,

and (3) that the funds collected be distributed without further

delay. The district court denied the motion with respect to the

first two requests, and granted it in part with respect to the

third, declaring the beneficiaries’ entitlement to have DOE

distribute the money “insofar as practicable.” 271 F. Supp. 2d

at 112. But the court neither ordered an immediate

distribution nor issued a timetable. Contrary to the clients’

request, the court found itself “unable either to issue a writ of

mandamus ordering DOE to complete distribution of those

funds or to declare that further delay in making the final

distribution is unjustified.” Id. at 111.

As noted above, the decision under review denying

Kalodner’s clients’ request for a fee based on Con Ed IV is the

second district court decision to do so. The clients initially

moved for fees in Con Ed IV in 2003 (then seeking only 5%),

and the court denied the motion on the ground that the money

was in the possession of the U.S. government and thereby

protected by sovereign immunity. Dec. 4, 2003 Order at 1-2.

The clients at the same time moved for joinder of sixteen

refund beneficiaries as class representatives of the

“respondents” to the fee motion. See Motion to Add Parties

as Respondents to Motion for Award of Common Fund Fee at

1, Con Ed IV (Oct. 9, 2003). The court denied the motion for

joinder, on the grounds that it would be “inappropriate,

particularly given the Court’s ruling on [sovereign

11

immunity].” Id. The clients appealed the Dec. 4, 2003 Order

to the Federal Circuit, which has exclusive jurisdiction over

ESA issues, see ESA § 211(b)(2), amended by Pub. L. No.

102-572, 106 Stat. 4506 (1992), and that court affirmed

without opinion. See Consolidated Edison Co. of New York v.

Abraham, 101 Fed. Appx. 356 (Fed. Cir. 2004). In 2004 the

clients filed another motion, renewing the claim, which the

district court, noting the unsuccessful appeal to the Federal

Circuit, denied on grounds of preclusion. The clients appeal.

As to Con Ed V, Kalodner and his clients argue that the

litigation increased the beneficiaries’ refunds by roughly $35

million by compelling DOE to modify its “volumetric

method” of calculation. See Mem. Op., Con Ed V (June 30,

2004). The clients’ lawsuit sought an order of final

distribution and alluded in general terms to the methodology

for computing refunds. Of the two modifications that

Kalodner and the clients would now attribute to Con Ed V,

one (“deferral”) is not mentioned in the complaint; the other

(inclusion of the “Citronelle account”) is mentioned but as we

shall see (in Part III below on “Causation”) appears never to

have been in dispute. After the case was filed, DOE issued its

notice of proposed procedures for final distribution. See

Notice of Proposed Procedures for Distribution of Remaining

Crude Oil Overcharge Refunds and Opportunity for

Comment, 68 Fed. Reg. 64,098 (Nov. 12, 2003) (“Proposed

Procedures”). Kalodner participated on behalf of his clients

in the ensuing administrative proceeding, and in that forum

urged inclusion of the Citronelle account and, for the first

time, “deferral.” Another participant urged the same points.

DOE accepted these suggestions, with the result (we are told)

of effectively increasing the total refund amount by $35

million, and published its final order several months later.

See Notice of Final Procedures for Distribution of Remaining

12

Crude Oil Overcharge Refunds, 69 Fed. Reg. 29,300 (May 21,

2004) (“Final Procedures”). Because the final distribution

appeared to be well under way by the time the court ruled, the

court dismissed Con Ed V as moot. Mem. Op., Con Ed V

(June 30, 2004).

* * *

We review the several dispositions de novo. This is

obvious for the outright dismissals of claims, see, e.g.,

Masonry Masters v. Nelson, 105 F.3d 708, 710-11 (D.C. Cir.

1997), but also applies to the court’s grant of fees in favor of

Kalodner’s clients for his work on Con Ed V, as the issues,

with one exception, are ones of law, for which the standard of

review is almost invariably de novo. See Edmonds v. FBI,

417 F.3d 1319, 1322 (D.C. Cir. 2005). The exception relates

to Kalodner’s causal role in generating the beneficiaries’

recovery, an issue of course containing elements of fact. But

the district court has so far engaged in no fact-finding, and all

we have before us are the movants’ allegations. We assume

the correctness of the allegations of specific facts, but not of

conclusions. For these we ask whether the record and specific

allegations support an inference of causation. See Judicial

Watch, Inc. v. U.S. Senate, 432 F.3d 359, 360 (D.C. Cir.

2005).

We proceed below in three steps. First, we consider

sovereign immunity. We find that three claims (claims 2, 3 &

4) are barred. The fee sought by Kalodner’s clients from the

government (claim 2) is barred with respect to his efforts in

Con Ed V (allegedly modifying the volumetric method):

sovereign immunity applies, so that the clients are barred in

the absence of a waiver, and they were not prevailing parties

13

within the meaning of EAJA’s waiver provision. With respect

to work in Con Ed IV, however, the clients qualify under

EAJA as prevailing parties in the minimal sense of the term;

but (as we see in the third step) there is considerable doubt

whether their litigation efforts played the causal role needed to

qualify for a common fund fee recovery. Kalodner’s suit

against the government in his own name (claims 3 & 4) enjoys

no EAJA waiver because he was not a party to the underlying

suits. And because Kalodner’s claims against the

beneficiaries (claims 5 & 6) are not against the government

(except with respect to one remedy request, which is

severable), sovereign immunity is completely inapplicable.

Thus, the only claims surviving sovereign immunity are the

clients’ claim against the government for Con Ed IV and both

of Kalodner’s claims against beneficiaries (claims 1, 5 & 6).

Second, preclusion issues abound. The beneficiaries fail

to make out a case for issue preclusion of the claims against

them (claims 5 & 6). The government has failed to press its

possible preclusion arguments (claim 1); thus we discuss them

only briefly and note that under our case law the omission

need not be fatal to the preclusion arguments’ resurrection on

remand. See Stanton v. District of Columbia Court of

Appeals, 127 F.3d 72, 77 (D.C. Cir. 1997).

Finally, as our summary has made clear, for claims not

barred by sovereign immunity, the controlling issue is whether

Kalodner’s civil litigation played a sufficient role in

generating the supposed “common funds” to warrant a fee

award. The answer is “maybe” for Con Ed IV (for the claim

by the clients against the government (claim 1) and the claim

by Kalodner against the beneficiaries (claim 5)), and “no” for

Con Ed V (claim 6).

14

We note that the government distributed the bulk of the

remaining refunds on the day of oral argument. See Final

Procedures for Distribution of Remaining Crude Oil

Overcharge Refunds, 71 Fed. Reg. 2,195 (Jan. 13, 2006). But

as the government set aside 10% of the private party refunds

pending this litigation (i.e., 10% of the 20% reserved for

private parties under the Stripper Well settlement, see

discussion in Part III.A. below), id. at 2,195-96, the

distribution doesn’t moot the case.

I. Sovereign Immunity

The threshold issue for the fee recovery suits is whether

the funds are protected by sovereign immunity. Monetary

claims against the government are barred by sovereign

immunity unless the government has expressly waived its

immunity. See Lane v. Peña, 518 U.S. 187, 192 (1996). To

some degree Kalodner and his clients argue that sovereign

immunity is simply out of the picture because of the nature of

their claims and the status of the refund process. In

anticipation of the failure of this theory, they assert a waiver

theory under EAJA. We address first the suit by Kalodner’s

clients against the government, then Kalodner’s own suit

against the government, and finally his suit against the

beneficiaries. Lastly, in all claims Kalodner and his clients

invoke ESA § 209 as yet another waiver theory. We find that

resolution of an ESA issue, which falls under the exclusive

appellate jurisdiction of the Federal Circuit, is not likely to be

required.

15

A. Kalodner’s clients’ claims against the government

In Kalodner I, addressing Kalodner’s efforts to recover a

common fund fee in other crude oil refund litigation, we held

that “the sine qua non of federal sovereign immunity is the

federal government’s possession of the money in question.”

310 F.3d at 770. We found sovereign immunity applicable,

without more, once we had determined that the government

was in possession of the relevant funds. Thus Kalodner I

makes clear that government possession of funds is itself

sufficient to establish sovereign immunity. Here, except for

the money distributed, which the government no longer

possesses, the money in dispute is clearly in the government’s

possession so that, under Kalodner I, sovereign immunity

appears to apply. Unless Kalodner’s clients can point to a

waiver, their claims against the government (claims 1 & 2) are

barred.

The clients’ first effort to overcome that conclusion rests

on a number of inapplicable cases. First they cite the

Supreme Court’s decision in Boeing Co. v. Van Gemert, 444

U.S. 472 (1980), especially its observation that a common

fund fee recovery would be appropriate “when each member

of a certified class has an undisputed and mathematically

ascertainable claim to part of a lump-sum judgment recovered

on his behalf.” Id. at 479. But the decision involves fee

recovery in private litigation and has nothing to do with

sovereign immunity. Were the clients to establish the

inapplicability of sovereign immunity, or a waiver, Boeing

might help them meet the ordinary common fund

prerequisites, but it does nothing to get them over the initial

sovereign immunity hurdle. Commonwealth of Puerto Rico v.

Heckler, 745 F.2d 709 (D.C. Cir. 1984), and Swedish Hospital

Corp. v. Shalala, 1 F.3d 1261 (D.C. Cir. 1993), are equally

16

useless in the clients’ effort to finesse the sovereign immunity

problem. Although both were suits against the government, in

Puerto Rico we found EAJA applicable (thus presupposing a

sovereign immunity bar), and in Swedish Hospital the only

issue was computation of the fee, the entitlement having

evidently been conceded or established. Finally, National

Treasury Employees Union v. Nixon, 521 F.2d 317 (D.C. Cir.

1975), is of no use to the clients on sovereign immunity; as we

said in Kalodner I, the money with respect to which a fee was

claimed had already been distributed. See Kalodner I, 310

F.3d at 770.

In a more realistic vein, the clients assert waiver under

EAJA. Although much of the clients’ language seems to

disclaim any reliance on EAJA, see Cross-

Appellees’/Appellants’ Reply Brief at 31 (“they are not”

“seeking a fee pursuant to the EAJA”) (emphasis added); see

also Appellant’s Initial Brief at 20 (“By his Complaint and his

Motion for Preliminary Injunction, Kalodner sought a fee . . .

not pursuant to the EAJA.”) (emphasis added), the briefs also

rather obscurely reserve EAJA as a “back-up,” see Cross-

Appellees’/Appellants’ Reply Brief at 54 (“Even if it were

necessary for Kalodner to rely on the EAJA, the reliance is

solely for the purpose of obtaining a waiver of sovereign

immunity.”); Appellant’s Initial Brief at 40 (“if not already so

waived, sovereign immunity is waived by the EAJA”).

Giving the clients the benefit of the doubt, we proceed to the

EAJA analysis.

EAJA provides:

Unless expressly prohibited by statute, a court may award

reasonable fees and expenses of attorneys . . . to the

prevailing party in any civil action brought by or against

17

the United States or any agency or any official of the

United States acting in his or her official capacity in any

court having jurisdiction of such action. The United

States shall be liable for such fees and expenses to the

same extent that any other party would be liable under the

common law or under the terms of any statute which

specifically provides for such an award.

28 U.S.C. § 2412(b) (emphasis added). (This waiver appears

quite distinct from the more familiar § 2412(d), which

contains additional qualifications. See, e.g., § 2412(d)(1)(B)

& (d)(2)(B).)

In Buckhannon Board & Care Home, Inc. v. West

Virginia Department of Health & Human Resources, 532 U.S.

598, 603-04 (2001), the Supreme Court interpreted two (non-

EAJA) statutes authorizing fee-shifting for prevailing parties,

and held that a party has not “prevailed” unless it has secured

some form of court-ordered relief. In so ruling, it rejected the

“catalyst theory,” under which a party could be found to

prevail if a defendant changed its conduct in response to a

pending law suit. Id. at 603. We have held that this

understanding of “prevailing party” applies to EAJA’s use of

the term. See Select Milk Producers, Inc. v. Johanns, 400

F.3d 939, 945 (D.C. Cir. 2005).

In Con Ed V, the clients obtained relief—but not from the

court. It came as a result of the agency’s favorable response

to their (and others’) comments in the agency proceeding,

suggesting two changes in the “volumetric” computation.

Although the complaint alluded vaguely to the method of

computation, it never framed a request for a change. The

agency accepted the theory—presumably on its merits, there

being no detectable judicial pressure to do so, much less a

18

judgment or any other form of court-ordered relief. The

clients are therefore not prevailing parties with respect to Con

Ed V, and the funds (sought in claim 2) remain protected by

sovereign immunity.

We note that the district court mistakenly distinguished

Kalodner I, evidently believing that EAJA had not been

considered by the court nor raised by the parties in that case.

Consolidated Mem. Op. at 8-9. In fact EAJA had been raised

in Kalodner I, albeit by the government. See Brief for the

Appellees at 28-29, Kalodner I. Our omission of any

discussion was plainly because of the ample reasons why

EAJA would not have availed Kalodner, the most obvious

being that Kalodner was simply not a “party” at all.

With respect to the work in Con Ed IV, however, the

clients appear to meet the minimum qualifications for

prevailing parties (claim 1). Although the Con Ed IV court

rejected two of the three claims sought in their motion for

partial summary judgment, it did grant a declaratory judgment

that the clients were entitled “to a distribution of the entire

20% reserve, insofar as practicable.” 271 F. Supp. 2d at 112.

As the court rejected the clients’ claims with respect to the

amount to be distributed, and as it imposed neither deadlines

nor even criteria for judging practicability, this was pretty thin

gruel, as we shall see when we discuss whether the judgment

may have had enough of a causal effect to justify a common

fund fee. But it does appear to meet the minimum

requirement of constituting court-ordered relief. Insofar as

qualification as “prevailing” requires more than the raw

Buckhannon minimum, see, e.g., Farrar v. Hobby, 506 U.S.

103, 109 (1992) (requiring that plaintiffs “succeed on any

significant issue in litigation which achieves some of the

benefit the parties sought in bringing suit”), that inquiry is

19

here subsumed in our discussion in Part III of whether

Kalodner’s civil litigation played enough of a role in

generating the beneficiaries’ recovery to warrant a common

fund fee.

B. Kalodner’s claims against the government

We affirm the district court’s dismissal of Kalodner’s suit

on his own behalf against the government (claims 3 & 4).

Sovereign immunity applies unless waived, for the reasons

addressed above. As to any EAJA waiver, Kalodner was

counsel in Con Ed IV and Con Ed V, not a party, and EAJA

provides attorneys’ fees only for parties. See Consolidated

Mem. Op. at 6.

C. Kalodner’s claims against the beneficiaries

The beneficiaries argue that sovereign immunity also bars

Kalodner’s attempt to recover fees from them (claims 5 & 6)

by virtue of Kalodner I’s holding that sovereign immunity

applies if the government is in possession of the relevant

funds. With respect to some of the relief sought by Kalodner,

this counter-intuitive proposition is correct. He indeed asks

for “[a]n Order directing the defendants [i.e., named non-

client beneficiaries] on behalf of each of the class members to

direct the DOE to withhold the fee awarded to plaintiff [i.e.,

Kalodner].” Complaint at 18, Kalodner-Public Service (Feb.

3, 2004). Unless the requested communication to DOE were

purely precatory (“Would you be so kind as to send some of

my money to Mr. Kalodner?”), it would pose the same

sovereign immunity issues as a direct court order against the

government. But Kalodner appears independently to also ask

for an order “awarding to plaintiff [from the beneficiaries]

20

10% of the distribution to each member of the [beneficiary]

class.” Id. Indeed in a later filing, Kalodner clarified that he

was requesting a declaratory judgment that beneficiaries have

an obligation to pay attorneys’ fees once the money is

distributed. See Plaintiff’s Motion for Summary Judgment at

1, Kalodner-Public Service (June 1, 2004); Plaintiff’s

Statement of Material Facts in Support of Plaintiff’s Motion

for Summary Judgment at 19, 38, Kalodner-Public Service

(June 1, 2004). And at oral argument, Kalodner verified that

the two requests were independent. See Oral Argument Tape

at 18:40-19:28, Kalodner-Public Service; see also Appellant’s

Initial Brief at 37-38; Appellant’s Reply Brief at 6-7.

Sovereign immunity poses no bar to Kalodner’s fee claims

against beneficiaries (claims 5 & 6).

D. ESA waiver theory

We come finally to the theory—asserted for all claims—

that Congress waived the government’s sovereign immunity

in ESA § 209. At the outset, we note that we’re puzzled by

the theory of § 209’s relevance. Kalodner and his clients

argue that because the underlying suits waived sovereign

immunity under ESA, immunity was also waived as to any

request for attorneys’ fees. But the ESA jurisdictional basis

that they asserted for their suits in Con Ed IV and Con Ed V

was § 210, not § 209. See Complaint at 3, Con Ed IV (Mar.

15, 2001); Complaint at 2-3, Con Ed V (Sep. 25, 2003).

As to the merits of the ESA § 209 theory, matters of

interpretation of EPAA and ESA generally fall under the

exclusive appellate jurisdiction of the Federal Circuit. See

ESA § 211(b)(2), amended by Pub. L. No. 102-572, 106 Stat.

4506 (1992) (providing that “[a]ppeals from orders or

21

judgments . . . in cases or controversies arising under [the

ESA] shall be brought in the . . . Federal Circuit”); 28 U.S.C.

§ 1295(a) (providing that the “Federal Circuit shall have

exclusive jurisdiction . . . of an appeal under section 211 of

the [ESA]”); Consolidated Edison Co. of New York v.

Abraham, 303 F.3d 1310, 1313-16 (Fed. Cir. 2002);

Consolidated Edison Co. of New York v. Ashcroft, 286 F.3d

600, 602-05 (D.C. Cir. 2002); Con Ed II, 117 F.3d at 541-42;

Texas American Oil Corp. v. United States Department of

Energy, 44 F.3d 1557, 1563 (Fed. Cir. 1995). For all claims

before us, the Federal Circuit has deferred parallel appeals to

await our decisions. See supra notes 2-4. In determining the

scope of the Federal Circuit’s exclusive jurisdiction, we not

surprisingly follow that circuit’s two-fold criteria: “First,

resolution of the litigation must require application or

interpretation of the ESA or regulations issued thereunder;

and second, the ESA issue must have been adjudicated in the

district court.” Consolidated Edison Co. of New York v.

Ashcroft, 286 F.3d 600, 603 (D.C. Cir. 2002) (citing Texas

American Oil Corp., 44 F.3d at 1563).

In the end it seems quite likely that no claim will meet the

first criterion. The three claims based on the work in

Con Ed V (claims 2, 4 & 6) cannot win regardless of any ESA

waiver; as we discuss in Part III, the absence of causation is

fatal. The claims based on litigation in Con Ed IV (claims 1, 3

& 5) may well also be finally resolved without regard to the

ESA. If on remand the district court finds that the Con Ed IV

litigation had insufficient causal effect, that is the end of the

matter. None of these fee claims could succeed. Even if the

court finds causation, Kalodner’s claim against the

government may be unavailing because any further fee

recovery for work on Con Ed IV would duplicate his recovery

against the beneficiaries and the clients’ recovery against the

22

government. The same is also true for the special type of

relief in Kalodner’s claim against the beneficiaries that we

found barred by sovereign immunity, namely the demand for

an order directing them to direct DOE to pay a portion of their

entitlements to Kalodner. While there may be scenarios under

which the application of preclusion would give a potentially

broad ESA waiver significance, it is premature to evaluate

such possibilities at this stage.

In closing, we note that the clients try to make something

of our statement in Kalodner I that “Congress has waived

sovereign immunity for Subpart V claimants.” 310 F.3d at

770. See Motion for Award of a Common Fund Fee at 24,

Con Ed V (July 12, 2004). But the sentence does them no

good. Our sole concern in that passage was to rebut

Kalodner’s claim under ESA § 210, and doing so required us

only to observe that Kalodner was not a “Subpart V claimant,”

310 F.3d at 770; he was their lawyer.

To recap, sovereign immunity bars Kalodner’s claims

against the government (claims 3 & 4) and the clients’ claim

against the government for Con Ed V (claim 2). Three claims

survive: Kalodner’s claims against beneficiaries (claims 5 &

6) and the clients’ claim against the government for Con Ed

IV (claim 1).

II. Preclusion

Before considering the merits of the surviving common

fund claims (Kalodner against the beneficiaries for both cases,

and the clients against the government for Con Ed IV), we

must note the issue of possible preclusion from the district

court’s December 4, 2003 rejection of the clients’ claims for a

23

fee for the work in Con Ed IV and that decision’s later

affirmance by the Federal Circuit.

A. Kalodner’s claims against the beneficiaries

In its December 4, 2003 fee decision in Con Ed IV, the

district court dismissed the clients’ motion to join refund

beneficiaries. They appealed to the Federal Circuit, which

denied the appeal by order. The refund beneficiaries argue

that the dismissal (and loss of the appeal) should preclude

Kalodner’s fee claim against beneficiaries for Con Ed IV’s

declaratory judgment (claim 5). Leaping over the issue of

whether Kalodner should be bound by his clients’ loss, we

address the nature of the district court’s order of dismissal, a

more obvious obstacle to the beneficiaries’ theory. The order

appears not to have been based on the merits or on any other

substantive theory. The court said simply that “joinder of

[beneficiaries] at this stage of the litigation and for this

purpose would be inappropriate, particularly given the Court’s

ruling on the previous motion [denying a fee claim against the

government on sovereign immunity grounds].” Dec. 4, 2003

Order at 3. Sovereign immunity, of course, would be no bar

to a claim directed to the beneficiaries, so the court’s entire

substantive discussion would have been, as to them, beside the

point. Indeed, the court seemed affirmatively to contemplate

the clients’ future pursuit of fees, suggesting that “[a] more

suitable option would be . . . to initiate a separate lawsuit

against applicable claimants . . . once [the government]

distribute[s] the monies from the 20% reserve.” Id. As the

court was evidently ruling only that the clients’ fee claim

against beneficiaries should be addressed in some other

context, it clearly did not resolve the issue before us—the

24

merits of that claim (or Kalodner’s). See Yamaha Corp. of

America v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992).

We do not understand the beneficiaries to be arguing

claim preclusion—really a rule against claim splitting. See,

e.g., Gener-Villar v. Adcom Group, Inc., 417 F.3d 201, 205

(1st Cir. 2005) (noting that claim preclusion “generally binds

parties from litigating or relitigating any [claim] that was or

could have been litigated in a prior adjudication and prevents

claim splitting”) (internal quotation omitted, brackets in

original). The case is unusual in that the district court created

the split by declining to reach the merits of the claim against

the beneficiaries. But there might be an argument that the

claims against the government and against the beneficiaries

were properly viewed as a single claim, so that the clients’

failure to get that aspect of the district court’s judgment

reversed would bind the claimants (and even Kalodner, if the

beneficiaries’ theory of privity is correct). We express no

opinion on such a theory.

The beneficiaries also make a distinctly confusing

argument that certain of the decisions under review here bar

Kalodner’s claims against them by virtue of issue preclusion.

In one respect the claim has merit, though the beneficiaries’

labeling is wrong. In so far as they argue that Kalodner

cannot double dip, recovering both through his clients and/or

against the government, and independently against

themselves, the beneficiaries are right, as Kalodner

forthrightly conceded at oral argument. See Oral Argument

Tape at 0:37-1:12 (in appeal No. 05-5089). That is not a

matter of issue preclusion, but of double recovery. See, e.g.,

Commissioners Court of Medina County v. United States, 719

F.2d 1179, 1182 n.6 (D.C. Cir. 1983). So far as issue

preclusion is concerned, the dispositive issue in the one case

25

not on review before us (i.e., the December 4, 2003 decision

and the failed appeal) related to sovereign immunity, which

provides the beneficiaries no defense. Thus, issue preclusion

cannot bar Kalodner’s claims against the beneficiaries (claims

5 & 6).

B. Kalodner’s clients’ claim against the government

With respect to the clients’ surviving fee claim against

the government (claim 1), DOE’s brief proclaimed it

unnecessary to delve into the preclusive effect of the

December 4, 2003 Order, instead relying on sovereign

immunity alone. This tactical choice is especially perplexing

because the district court invoked preclusion in finding in the

government’s favor as to Con Ed IV. As to those fees, we’ve

just ruled, the clients formally qualify as “prevailing parties”

under EAJA’s waiver provision. As the government failed to

brief the preclusion issue for fee claims against it, and as we

are remanding the issue, for prudential reasons we do not

address it here. We note for the benefit of the parties and the

district court, however, that because interests of judicial

economy are at stake in preclusion doctrines, courts retain the

power to consider such doctrines sua sponte. See Stanton v.

District of Columbia Court of Appeals, 127 F.3d 72, 77 (D.C.

Cir. 1997).

III. Common Fund Causation

Our circuit law permits “a party who creates, preserves,

or increases the value of a fund in which others have an

ownership interest to be reimbursed from that fund for

litigation expenses incurred.” Swedish Hospital, 1 F.3d at

1265 (emphasis added). All three variants express the

26

necessity that the claiming parties’ litigation have played a

causal role in achieving the benefits for which they seek fee

reimbursement. Similarly, the Supreme Court has demanded

that “[t]he benefits could be traced with some accuracy.”

Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S.

240, 265 n.39 (1975). See also In re Holocaust Victim Assets

Litigation, 424 F.3d 150, 157 (2d Cir. 2005) (“The actions of

the party seeking to recover costs must . . . be a substantial

cause of the benefit obtained.”) (citation and internal

quotation omitted); Knight v. United States, 982 F.2d 1573,

1579-80 (Fed. Cir. 1993) (describing typical cases to involve

third party beneficiaries of enhancement or preservation of

assets or trust); Vincent v. Hughes Air West, 557 F.2d 759,

771 n.10 (9th Cir. 1977) (“[T]he common fund doctrine

requires that the work of the attorney seeking an extra fee be a

cause-in-fact of any claimed benefit to the fund and its

beneficiaries.”); see generally FEDERAL JUDICIAL CENTER,

AWARDING ATTORNEYS’ FEES AND MANAGING FEE

LITIGATION 62-64 (2005) (“the plaintiff must . . . establish that

its suit was a ‘but for’ cause of the fund (or at least ensured

access to the fund).”).

The question hence becomes whether Kalodner and the

clients have pleaded facts supporting an inference of the

requisite causation on the three potentially viable claims

(claims 1, 5 & 6). We remand the two claims that ride on the

alleged success in Con Ed IV so as to give the fee claimants a

chance to make their case (claims 1 & 5). As to Kalodner’s

claim against the beneficiaries based on Con Ed V (claim 6,

the only claim based on Con Ed V not already found barred by

sovereign immunity), the record shows the absence of

causation as a matter of law.

27

A. The declaratory judgment in Con Ed IV

Kalodner argues that Con Ed IV’s declaratory judgment

created or preserved the fund by requiring the government to

distribute the previously undistributed portion of the private

parties’ 20% of collections set aside pursuant to the Stripper

Well settlement, overcoming DOE’s alleged reservation of a

right not to do so. Yet DOE’s expression of a reservation

does not mean in itself that Con Ed IV was a cause (much less

a substantial cause) of the final distribution. Reluctance is not

refusal. We find the record inconclusive.

We note a few basic points at the outset. First, the

decision to grant private crude oil purchasers 20% of certain

overcharge collections dates back to the 1986 settlement. See

Stripper Well, 653 F. Supp. at 114 (noting that DOE “will . . .

establish an initial reserve for [private beneficiaries not party

to the settlement agreement] amounting to twenty percent of

the funds received by the DOE”); Statement of Modified

Restitutionary Policy in Crude Oil Cases, 51 Fed. Reg.

27,899, 27,900 (Aug. 4, 1986) (providing that “OHA will

establish an initial reserve fund for these claims of twenty

percent” of crude oil overcharges). Although DOE

undoubtedly hemmed and hawed a good deal on the follow-

through, Kalodner and his clients have never pointed to any

statement indicating an affirmative intent to renege on the

planned distribution of the 20% reserve.

Second, although some of the language in the Con Ed IV

decision seems directed to getting DOE moving, there is no

claim that Kalodner’s civil litigation helped the beneficiaries

by accelerating pay-out. Nor does it appear that there could

be. First, it will be recalled that the Con Ed IV expressly

declined to impose any deadline. More pertinently, interest

28

has been accruing on the funds (evidently from the outset, and

certainly during the period relevant to Kalodner’s litigation

activities in Con Ed IV and Con Ed V), see, e.g., Citronelle-

Mobile Gathering, Inc. v. Edwards, 669 F.2d 717, 723 (Temp.

Emer. Ct. App. 1982) (noting “that the Government has a duty

to try to ascertain those overcharged, and refund them, with

interest, from the restitution funds”) (second emphasis added);

Final Procedures, 69 Fed. Reg. at 29,301 (noting that

“interest will continue to accrue . . . until the refund process is

completed”), so the beneficiaries have been and are being held

harmless from the effects of delay.

Third, the government and beneficiaries assert that the

court should not award a common fund fee because it was

DOE’s own pursuit of the overcharging crude oil sellers that

led to the accumulation of the funds to be distributed. This is,

of course, true, but in significant part it misses the point. It

may come as a surprise to counsel, but in all lawsuits

producing only money judgments or fund pay-outs, it is not

counsel who have created the wealth to be distributed.

Mandatory payments do not create wealth (except indirectly,

in so far as they enforce rules that provide incentives for

wealth-creating behavior); they simply redistribute it. This is

true whether the funds distributed originate with taxpayers or,

as here, with sellers of crude oil and the government’s refund

mavens. But the common fund theory provides a potential

basis for payment nonetheless; to the extent that the litigation

secured for the beneficiaries sums that otherwise would have

flowed to other parties or would have been retained by the

government, a common fund fee would be in order. See, e.g.,

United States v. American Society of Composers, Authors and

Publishers, 466 F.2d 917 (2d Cir. 1972).

29

Fourth, Kalodner and the clients mistakenly argue that the

district court made a factual finding of causation deserving of

deference. Such a finding would of course be surprising,

given the court’s dismissal of the claims with respect to Con

Ed IV on preclusion grounds. Kalodner points to the district

court’s statement that Con Ed V “insured the implementation

of the Court’s declaratory judgment in Con Ed IV that DOE

should disburse approximately $275 million in funds.”

Consolidated Mem. Op. at 10. But this adds up to very little.

The language appears more aimed at describing the effect of

Con Ed V (which we address below) on ensuring the

implementation of the prior declaratory judgment than the

effect of the declaratory judgment itself. And the district

court’s opinion in Con Ed IV seems in fact (1) to have

recognized that its word was by no means the last and (2) to

have believed that the government’s primary concern was to

be assured that all refund claims should be properly resolved.

See 271 F. Supp. 2d at 110 (noting that “OHA has advised

plaintiffs that it will not be in a position to determine whether

any further direct payments to plaintiffs is [sic] warranted

until all remaining refund claims are processed”) (internal

quotation omitted). Worst for the argument advanced by

Kalodner and his clients is that this language runs straight into

the earlier order dismissing Con Ed V as moot and saying that

the court “decline[d] [plaintiffs’] invitation to declare them

‘victor’ just because the contemporaneous administrative

process adopted many of their distribution criteria.” Mem.

Op. at 2-3, Con Ed V (June 30, 2004). And the court’s

statement that “Kalodner was successful in two adverse civil

suits against DOE,” Consolidated Mem. Op. at 5, fails to

make a finding as to any substantive consequence of

Kalodner’s “success.” While formal success may be

minimally sufficient to qualify Kalodner’s clients as

prevailing parties under Buckhannon, see 532 U.S. at 604, it

30

doesn’t establish common fund causation. And the district

court simply did not come close to making such a factual

finding.

We now turn to the main substantive question of what

DOE was likely to have done independent of the litigation. Its

communications leave us uncertain how to classify its intent,

as between serious contemplation of an ultimate decision not

to make the roughly $280 million final distribution and merely

a plan to go slow in light of continuing uncertainties. OHA

said, for instance, in reply to one of Kalodner’s letters

requesting distribution (amid many calling for distribution and

also asserting various computational claims), that it “should

continue to devote all available resources to the completion of

pending original and supplemental applications, before

addressing the issue of whether to make a final payment to

applicants that have already received refunds [among them,

Kalodner’s clients].” Letter from George B. Breznay,

Director, OHA, to Philip P. Kalodner (July 11, 2000) (filed as

Exhibit D of Plaintiffs’ Motion for Partial Summary

Judgment, Con Ed IV (Sep. 4, 2001)). Though the “whether”

suggests uncertainty about making any final payment to

parties situated as were Kalodner’s clients (and, evidently, the

beneficiaries here), the letter also appears to reflect a

straightforward matter of priorities—putting work on pending

applications first.

Indeed, it isn’t altogether clear that even the clients saw

OHA’s position as seriously considering non-payment. Like

many communications to the agency, the Con Ed IV

complaint seems driven more by plaintiffs’ unsuccessful

efforts to get beyond the 20% limitation. Thus the complaint

asserted that “Defendant Breznay continues (in decisions

issued with regard to claimants being approved for refunds) to

31

refuse to commit DOE to any distribution . . . he has indicated

that any such subsequent distribution will in any event be

limited by employing in all distributions only 20% of the

funds.” Complaint at 11, Con Ed IV (Mar. 15, 2001).

On the fee claimants’ side we note that the outstanding

potential claims against the fund seem modest in relation to

the sums available. In other words, there was no risk that the

remaining money in the 20% reserve would be fully or even

largely depleted; the lack of money doesn’t seem to have

warranted a determination as to “whether any further direct

payments . . . [are] warranted.” In the government’s motion to

dismiss, it described “several hundred refund cases pending”

and then noted pending litigation that seemed to put at risk

about $11.5 million (DOE noted four pending cases,

indicating the amounts at stake in each of three suits, namely

$930,063, $3,591,485, and $6,977,635). See Defendants’

Memorandum of Points and Authorities in Support of Their

Motion to Dismiss or in the Alternative for Summary

Judgment at 15 & n.4, Con Ed IV (Aug. 1, 2001). In addition,

there seem to have been about $1 million outstanding in small

claims. See 271 F. Supp. 2d at 107, 106 & n.7, 111 n.7.

Other statements of the government also seem to reflect

an idea that plaintiffs may have been due no more than what

they had already received. At one point, for instance, DOE

made a rather sweeping statement implying that it thought that

a final distribution was entirely discretionary:

[T]he fact that OHA has determined that plaintiffs were

eligible to receive an initial distribution does not compel

the conclusion that an additional payment is now

required. Plaintiffs point to nothing in the record to

support such a contention or to show that the funds

32

already paid [to] plaintiffs may not be sufficient to

compensate them for any actual injuries suffered.

Defendants’ Reply in Support of Their Motion to Dismiss or

in the Alternative for Summary Judgment at 2-3, Con Ed IV

(Oct. 1, 2001) (emphasis added). The district court flatly

rejected this, finding that plaintiffs “are entitled to the

complete distribution of the 20% reserve funds that the DOE

created” and that “[t]he DOE cannot now suddenly change

that commitment and the implementing regulations unless and

until the 20% reserve proves to be more money than needed,

which is clearly not the case.” 271 F. Supp. 2d at 110.

But other statements cut against the fee claimants’

interpretation. DOE gave strong signs of moving

independently towards making a final distribution. For

example, DOE spoke of “a determination by DOE as to the

distribution of the more than $262 million now in escrow in

the U.S. Treasury” and that “Breznay . . . has submitted a

memorandum [in December 2001] containing his

recommendation as to such distribution to the Office of

General Counsel of DOE, the contents of which are unknown

to plaintiffs, but no action has been taken on such

recommendation by the defendant Secretary of Energy.” Joint

Memorandum of Status at 6-7, Con Ed IV (Mar. 14, 2002).

Indeed, the Joint Memorandum’s summary of DOE’s

positions seems to focus on (1) legalistic claims that plaintiffs

lack a cause of action to compel immediate distribution and

(2) computational issues on which plaintiffs ultimately lost.

Id. at 4-6. See, e.g., Letter from Philip P. Kalodner to George

B. Breznay, Director, OHA (Mar. 8, 1999) (filed as Exhibit D

of Plaintiffs’ Motion for Partial Summary Judgment, Con Ed

IV (Sep. 4, 2001)) (stating that “unless you advise me prior to

March 31, 1999 that you will recognize my clients’ immediate

33

right to receive the balance of the $2800 per million gallons

not yet paid them . . . I will institute a mandamus action to

require OHA and DOE to make such a supplemental

distribution to my clients” and threatening to request an

“order[] to make an immediate distribution”). As the

plaintiffs in Con Ed IV loudly proclaimed, they had peppered

OHA with letters demanding attention and complaining of

OHA’s failure to reply promptly. See Plaintiffs’ Statement of

Points and Authorities in Opposition to Defendants’ Motion to

Dismiss or in the Alternative for Summary Judgment and in

Support of Plaintiffs’ Motion for Partial Summary Judgment

at 29-31, Con Ed IV (Sep. 4, 2001). Conceivably even a very

dutiful official might have come to perceive Kalodner as a

nuisance, and such a perception might have colored his

reactions and provoked a use of legalistic defenses, even if, as

a substantive matter, the government fully intended to

distribute the money in any case.

Lastly, we are unpersuaded by the fee claimants’

suggestion that DOE’s Proposed Procedures decision itself

establishes that Con Ed IV caused the final distribution. In the

summary of the order DOE said that Con Ed IV “rendered a

declaratory judgment that successful claimants are entitled to

a distribution of the entire remaining amount of crude oil

overcharges reserved for direct restitution, ‘insofar as

practicable.’ OHA will therefore make a final distribution in

the long-standing crude oil refund proceeding.” 68 Fed. Reg.

at 64,098 (emphasis added). But in this very passage DOE

refers to the amount as already “reserved for direct

restitution,” id., arguably implying that it would have been

distributed even without the declaratory judgment.

In the end, our efforts to draw an inference of causation

face major informational deficits. Notably, the record

34

contains allusions to the December 2001 OHA memorandum

to DOE counsel proposing a disposition of the $270 million

then on hand, see Reply Memorandum in Support of Motion

for Award of Common Fund Fee at 16-17, Con Ed IV (June

12, 2003), but not the memorandum itself. Clients assert that

DOE has refused to release it. Id. The OHA memorandum

itself, of course, may not be dispositive, as the ultimate

decision may have lain with others, such as DOE counsel or

perhaps the Secretary of Energy. Given the ambiguities in

OHA’s formal public position, we are unable to reach a

conclusion about causation and we agree with the clients and

Kalodner that limited discovery may be useful to bring OHA’s

position to light and thus afford them an adequate opportunity

to establish that DOE would not have paid out the refunds had

Con Ed IV never been brought.

B. The volumetric adjustment of Con Ed V

While sovereign immunity bars the clients’ claim to a fee

for the legal efforts involved in Con Ed V (for want of court-

ordered relief), that doctrine has no effect on Kalodner’s claim

against the beneficiaries based on that case (claim 6). We

thus must assess whether those efforts increased the common

fund by certain adjustments in the “volumetric” amount, or

simply “volumetric,” used to calculate refunds. The

“volumetric” amount represents the total dollar amount

remaining in the reserve (the numerator) divided by the total

number of gallons purchased by all eligible claimants (the

denominator). See Proposed Procedures, 68 Fed. Reg at

64,100. Each claimant would then receive a refund of the

volumetric times the number of gallons purchased by that

claimant (effectively a weighted average of the reserve).

Kalodner claims that Con Ed V increased the common fund

35

via two adjustments of the volumetric adopted in the Final

Procedures. First, the Final Procedures included $9.5 million

in escrow in the “Citronelle” account in the numerator,

thereby increasing the total payout to all beneficiaries; the

Proposed Procedures hadn’t mentioned this one way or the

other.

Second, the Final Procedures deferred calculation until

verification of all claims (other than time-barred ones) was

complete, thus excluding ineligible claims from the

denominator (and thereby increasing the pay-out). Claims

might ultimately be found ineligible for a number of reasons,

including: (a) forfeiture by large refund recipients of future

claims due to failure to request supplement refunds, (b) failure

by small refund recipients to apply for a final distribution due

in large part because no notice would be provided, (c) a

finding that claimants are unqualified successors-in-interest,

or (d) reduction of a prior award. See Philip P. Kalodner,

Comments of Utilities, Transporters and Manufacturers at 7-

13 (Jan. 8, 2004); Douglas B. Mitchell, Comments Regarding

the Proposed Procedures for Distribution of Remaining Crude

Oil Overchange [sic] Refunds at 3 (Jan. 12, 2004). Here the

difference between the Proposed and the Final Procedures

appears sharper than for the Citronelle account, as the

Proposed Procedures seemed to include such claims in the

denominator, whereas Kalodner’s and Mitchell’s proposed use

of the (already planned) 180-day notice period could be

expected to weed out the ineligibles.

Kalodner claims that the two adjustments increased the

common fund by $35 million. As both the Proposed and the

Final Procedures made this round of distributions truly final,

allocating any leftover sums to state and federal governments,

see Proposed Procedures, 68 Fed. Reg. at 64,100; Final

36

Procedures, 69 Fed. Reg. at 29,301-02, the adjustments came

at the expense of those governments. (It appears that

Kalodner is including interest payments. These of course did

increase the gross sum paid out—but only by an amount

needed to compensate recipients for the delay that Kalodner

himself sought.)

The district court attributed this $35 million increase to

Kalodner’s litigating efforts in Con Ed V and awarded a fee

calculated as 30% of that supposed increase. We find nothing

in the record supporting the idea that Con Ed V played any

such role.

The fact that the Con Ed V suit was dismissed for

mootness is not in itself dispositive. It is true that common

fund cases typically hinge on some form of court-ordered

relief. See, e.g., Mills v. Electric Auto-Lite Co., 396 U.S. 375,

393-94 (1970); National Treasury Employees Union v. Nixon,

521 F.2d 317, 320-21 (D.C. Cir. 1975); see generally ALBA

CONTE, I ATTORNEY FEE AWARDS § 2.1 at 41 (3d ed. 2005)

(noting that “the unarticulated threshold requirement for

application of the common-benefit doctrine is that the

claimant must enjoy some form of success on the merits of the

litigation”). But in this area some version of the catalyst

theory applies, illustrated by decisions awarding common

fund fees even where the claimants’ action was dismissed as

moot. In Koppel v. Wien, 743 F.2d 129 (2d Cir. 1984), for

instance, the Second Circuit reversed the district court’s denial

of a common fund fee where the defendants, after the suit was

filed, had voluntarily abandoned the project plaintiffs had

sued to enjoin. Id. at 131-32, 135. See also Savoie v.

Merchants Bank, 84 F.3d 52, 56-57 (2d Cir. 1996). Although

in Koppel and Savoie the Second Circuit held that where a

case is mooted the burden shifts to defendants to prove the

37

absence of causation, see 743 F.2d at 135; 84 F.3d at 57, in

both cases the record appeared to offer no plausible

explanation for the defendants’ action other than the lawsuit

itself. In contrast, the Con Ed V litigation occurred in parallel

with an entirely separate administrative proceeding conducted

by DOE, in which Kalodner and others participated actively.

As the district court said in finding the Con Ed V suit moot,

“[t]he appropriate venue for consideration of the plaintiffs’

proposed distribution methodology was the administrative

comment process, which they successfully utilized.” Mem.

Op. at 3, Con Ed V (June 30, 2004). Kalodner doesn’t even

appear to claim that his persuasive efforts before DOE,

independent of some supposed judicial pressure induced by

his civil litigation, could entitle him to fees. That implied

concession appears in full accord with the law. See Knight,

982 F.2d at 1576, 1581 (denying common fund fee for results

of administrative action taken before any court order or indeed

any filing of suit).

Of the two changes supposedly wrought by Con Ed V, we

consider first the idea of deferring the calculation until the end

of a 180-day period (already provided for in the Proposed

Procedures), so as to exclude unresolved claims from the

denominator of the fraction governing the beneficiaries’

entitlements. The complaint in Con Ed V never requests any

such deferral. It merely requests “an Order directing the

defendants to distribute to plaintiffs and the members of the

class an amount per million gallons of qualified product

purchases determined pursuant to the formula set forth in

paragraph 33 [of the complaint], some $650 to more than

$700 per million gallons.” The $650-700 per million gallons

is close to the range that DOE itself proposed in its Proposed

Procedures. See 68 Fed. Reg. at 64,100 (proposing

volumetric amount of $670 per million gallons). Given the

38

numbers in the complaint, we are baffled by Kalodner’s

assertion on brief that Con Ed V increased the amount from

$670 to $750-800 per million gallons.

Worse for Kalodner, the complaint appears to demand a

denominator consisting of “the sum of the volume of

purchases by applicant end user claimants already found

qualified for recovery and the volume of purchases by

claimants whose claims have not as yet been processed.”

Complaint at 11, Con Ed V (Sep. 25, 2003) (emphasis added).

It thus implicitly urged inclusion of those very claims for

which Kalodner, in his administrative comment, successfully

advocated exclusion. The relationship completely contradicts

Kalodner’s claims for Con Ed V.

In fact, the first time that Kalodner’s clients ever

appeared to raise the deferral issue in Con Ed V was in their

motion for summary judgment, filed with the court nearly four

months after the complaint and eight days after Kalodner filed

comments in the administrative proceeding. See Plaintiffs’

Memorandum in Opposition to Defendants’ Motion to

Dismiss and Statement of Points and Authorities in Support of

Plaintiffs’ Motion for Summary Judgment at 13-14, Con Ed V

(Jan. 16, 2004). See also Plaintiffs’ Memorandum in Reply to

Defendants’ Opposition to Plaintiffs’ Motion for Summary

Judgment at 10, Con Ed V (Mar. 18, 2004) (noting that

deferral was raised in the “Initial Memorandum,” i.e., the

motion for summary judgment, see id. at 3-4, but not noting

the complaint); Defendants’ Memorandum of Points and

Authorities in Reply to Plaintiffs’ Opposition to Defendants’

Motion to Dismiss and in Opposition to Plaintiffs’ Motion for

Summary Judgment at 2, Con Ed V (Feb. 20, 2004) (correctly

noting that “[n]one of these allegations [about deferral] are

raised in plaintiffs’ complaint in this matter which simply

39

sought the distribution the agency has stated it will

undertake.”).

Further weakening the causal link is the fact that not only

Kalodner, but another lawyer, Douglas B. Mitchell, acting on

behalf of 104 individual claimants and two filing services,

filed a comment suggesting deferral. See Douglas B.

Mitchell, Comments Regarding the Proposed Procedures for

Distribution of Remaining Crude Oil Overchange [sic]

Refunds at 2-3 (Jan. 12, 2004) (“Mitchell Comments”)

(suggesting deferral until verification is complete, after a 180-

day last-chance notice period); see also Declaration of George

B. Breznay, Con Ed V (Feb. 9, 2005). Even where court

action is the source of the relief sought, the fact that parties

with interests in the common fund were separately represented

may militate against the award of a common fund fee. See,

e.g., United States v. Tobias, 935 F.2d 666, 668 (4th Cir.

1991); Vincent v. Hughes Air West, Inc., 557 F.2d 759, 771

(9th Cir. 1977); see generally 20 AM. JUR. 2D COSTS § 66. In

any event, as we noted earlier, Kalodner appears to concede

that triumphs at the agency level, unless shown to have been

caused by some sort of actual or realistically threatened

judicial action, give rise to no common fund entitlement.

Unlike its treatment of deferral, the complaint at least

took the same position on the $9.5 million Citronelle account

that Kalodner did in the administrative proceeding. But there

is no evidence that the Con Ed V filing caused its inclusion in

the numerator in the Final Procedures. As with deferral,

Mitchell’s comment also advocated the inclusion of the

Citronelle account. See Mitchell Comments at 2. More

important, inclusion of the Citronelle refund appears to have

already been contemplated by DOE. In its reply to the

comments, DOE expressly stated, “It is already DOE’s

40

practice that ‘returned funds’ . . . are deposited.” 69 Fed. Reg.

at 29,301. Further, the settlement under which the Citronelle

funds were recouped (to which Kalodner was a signatory)

itself required that those funds be paid to the other crude oil

end users. See Declaration of George B. Breznay at ¶ 16

(February 9, 2005). Kalodner offers nothing other than a

conclusory assertion to contradict the reasoning behind

Breznay’s explanation of why “those funds would have been

included in the final crude oil distribution, regardless of any

comment by Mr. Kalodner.” Id. See also Brief for the

Appellees/Cross-Appellants at 33 n.6.

Lastly, we also find that there is no evidence that Con Ed

V contributed to the probability of the final distribution vel

non. It is undisputed that in a series of telephone

conversations with Kalodner from August 25 to September

22, 2003, before the September 25, 2003 filing of the

Con Ed V complaint, DOE Assistant General Counsel Skubel

indicated that OHA was proceeding with plans for a final

distribution. Nonetheless, Kalodner’s clients proceeded to file

their complaint. Moreover, that filing occurred only some 20

weeks after Con Ed IV’s declaratory judgment, which itself

specifically left timing to OHA’s discretion. See 271 F. Supp.

2d at 111. The timing and circumstances suggest that Con Ed

V did nothing more than exhibit once again Kalodner’s

trigger-happiness (and perhaps that of his clients).

Notwithstanding the district court’s language, there is simply

no evidence in the record that Con Ed V in any way “caused”

the distribution itself.

41

* * *

To recap by reference to the claims as enumerated in

Table 1: the December 4, 2003 order may preclude the

clients’ fee claim against the government for Con Ed IV

(claim 1). If not, the claim turns on the causal effect (if any)

of Con Ed IV. The clients’ claim against the government for

Con Ed V (claim 2) and each of the claims by Kalodner

against the government (claims 3 & 4) are barred by sovereign

immunity. Lastly, Kalodner’s claim against the beneficiaries

for Con Ed IV (claim 5), if not precluded, turns on the causal

effect of Con Ed IV, while that for Con Ed V (claim 6) fails

for lack of causation.

We repeat that on remand the preclusion arguments are

not themselves precluded. To the extent that claims (not

already defeated by sovereign immunity) survive any

reconsideration of preclusion, the court should conduct a

limited hearing or discovery for purposes of determining the

causal effect of Con Ed IV. See Copeland v. Marshall, 641

F.2d 880, 905 n.57 (D.C. Cir. 1980).

If Kalodner or the clients get past the basic causation

hurdle, fee computation may be quite complex. In

Democratic Central Committee of D.C. v. WMATC, 38 F.3d

603, 606 (D.C. Cir. 1994), we noted that payment should be

allowed “only as a reasonable proportion of the amount

actually collected . . . for which petitioners’ attorneys were

responsible,” i.e., proportional to the degree to which the civil

litigation enhanced the probability of pay-out to the

beneficiaries in question and the amount distributed.

Presumably the aim should be to assure that Kalodner’s total

recovery would approximate what a single claimant to the

common fund would have negotiated with him absent the

42

transactions costs due to free-rider temptations and sheer

numbers. Thus, if the probable effect of the litigation was to

raise the chances of recovery from, say, 95% to 100%, we

suppose that this relationship would be reflected in the fee.

We note also that Kalodner originally sought a 5% common

fund fee in Con Ed IV, whereas he asks for 10% here.

Compare Motion for Award of Common Fund Fee at 3, Con

Ed IV (May 23, 2003) (requesting “5% of the amount to be

distributed to all claimants”); with Motion of Award of

Common Fund Fee at 1, Con Ed V (July 12, 2004) (requesting

10% fee); Complaint at 2, Kalodner-Abraham (Jan. 7, 2005)

(requesting 10% fee); First Amended Complaint at 18,

Kalodner-Public Service (Mar. 8, 2004) (requesting 10% fee).

If the 5% represents Kalodner’s own theory of the marginal

value of his contribution in Con Ed IV, whereas the 10%

request here represents his guess for efforts both in Con Ed IV

and Con Ed V, then our denial of his fee request in Con Ed V

would have implications for Kalodner’s maximum claim.

We affirm the dismissal of Kalodner’s claims against the

government for his efforts in both Con Ed IV and Con Ed V

and of his claim against the beneficiaries for his work in

Con Ed V (claims 3, 4 & 6). We reverse the grant of the

clients’ claim against the government relating to Con Ed V

(claim 2). This leaves two claims— the clients’ claim against

the government, and Kalodner’s claim against the

beneficiaries—both for Kalodner’s efforts in Con Ed IV

(claims 1 & 5). As to these, we reverse the judgments

denying recovery and remand for further proceedings

consistent with this opinion.

So ordered.