United States ex rel. Thrower v. Academy Mortgage Corporation
The Ninth Circuit reverses a fee enhancement awarded to a successful False Claims Act relator’s counsel, holding that an above-lodestar multiplier is reserved for the “rare and exceptional” case and may not rest on factors already subsumed in the lodestar — and that the district court’s 1.75 multiplier lacked a reviewable methodology.
United States ex rel. Thrower v. Academy Mortgage Corp. (9th Cir. 2026) 172 F.4th 703
Ninth Circuit — binding federal authority in the Ninth Circuit, including the district courts of California. Confirm subsequent history before relying on it.
Remedies & Fees
False Claims Act
Lodestar multiplier
Reversed
In brief. Gwen Thrower, a former Academy Mortgage employee, brought a qui tam action under the False Claims Act and, after the government declined to intervene and even moved to dismiss, ultimately settled successfully. Her counsel obtained a fee award under 31 U.S.C. § 3730(d)(2) that the district court enhanced with a lodestar multiplier. The Ninth Circuit reversed. Under Perdue v. Kenny A., an above-lodestar enhancement is reserved for the “rare and exceptional” case and may not be based on considerations already subsumed in the lodestar calculation; this was not such a case, and the district court’s 1.75 multiplier “lacked an adequately reviewable methodology,” an independent reason to reverse. (United States ex rel. Thrower v. Academy Mortgage Corp. (9th Cir. 2026) 172 F.4th 703, 706–707, 713.)
By Jonathan J. Delshad
Draft for review · source-verification pending
Facts and statutory framework
The American Rule makes each party “generally responsible for paying its own attorneys’ fees,” subject to statutory fee-shifting. (172 F.4th at p. 706, citing Hensley v. Eckerhart (1983) 461 U.S. 424, 429.) The False Claims Act includes such a provision: when a relator successfully litigates a qui tam claim the government has not taken over, the relator is entitled to “reasonable expenses … plus reasonable attorneys’ fees and costs.” (Id. at p. 706, quoting 31 U.S.C. § 3730(d)(2).) Courts calculate “reasonable” fees by the lodestar method — the prevailing market rate multiplied by hours reasonably worked — which “cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results.” (Id. at pp. 706–707, quoting Perdue v. Kenny A. ex rel. Winn (2010) 559 U.S. 542, 551–552.)
In 2016, Gwen Thrower sued her former employer, Academy Mortgage, under the FCA, alleging Academy falsely certified compliance with the Federal Housing Administration’s Direct Endorsement Program, under which lenders underwrite mortgages for government insurance. (172 F.4th at p. 707.) The government declined to intervene, citing too little evidence of systemic fraud, but Thrower’s contingency-fee firm pressed on — building a “hundreds-of-pages-long call sheet” of former employees, interviewing them, and amending the complaint. (Ibid.) After Academy moved to dismiss and the government later moved to dismiss on its own cost-benefit analysis, Thrower’s counsel defeated both motions; a panel dismissed the government’s appeal for lack of jurisdiction. (Id. at pp. 707–708.) In late 2022, Thrower and Academy settled. (Id. at p. 708.)
Procedural history
Following the settlement, Thrower sought attorneys’ fees under section 3730(d)(2). (172 F.4th at p. 708.) The district court calculated a lodestar and then applied a multiplier — adopting a 1.75 enhancement after considering the requested 2.0 — roughly multiplying counsel’s fees. (Id. at pp. 707–708, 713.) Academy appealed the enhancement. Reviewing the fee award, the Ninth Circuit reversed the multiplier and remanded. (Id. at p. 713.)
Issue
When, if ever, may a district court awarding statutory attorneys’ fees under the False Claims Act depart from a straight lodestar calculation and award an enhancement multiple times greater than the lodestar — and did the district court permissibly do so here? (172 F.4th at p. 707.)
Holding
Reversed and remanded. Because “this is not the ‘rare and exceptional’ case justifying an enhancement above the lodestar calculation,” the multiplier cannot stand. (172 F.4th at p. 707.) Given “the comprehensive nature of the lodestar calculation, any enhancements are rare and exceptional,” and “a multiplier may be awarded only upon specific evidence that the lodestar fee is unreasonably low”; factors “already subsumed in the lodestar determination” — such as the complexity of the case or the quality of representation — cannot justify a multiplier. (Id. at pp. 706–707.) Separately, the district court’s “choice of a 1.75 multiplier lacked an adequately reviewable methodology,” which “is an independent reason to reverse the enhancement.” (Id. at p. 713.)
Reasoning
1. The lodestar already captures most fee considerations. The court emphasized that the lodestar method is comprehensive: the reasonable hourly rate and reasonable hours together account for the case’s difficulty, the lawyering required, and the results obtained. (172 F.4th at pp. 706–707.) Because those factors are “subsumed in the lodestar figure,” reusing them at the multiplier stage would “break[] the back of the lodestar method,” reintroducing the unpredictable, discretion-laden fee awards the lodestar was designed to discipline. (Id. at p. 707.)
2. Enhancements require specific evidence the lodestar is unreasonably low. Following Perdue, the court held a multiplier is permissible “only upon specific evidence that the lodestar fee is unreasonably low,” for example where the method used to calculate the base rate fails to capture an attorney’s true market value. (172 F.4th at pp. 706–707.) An enhancement “for superior attorney performance” is improper when that performance is already reflected in the hours and rate. (Id. at p. 707.) The relator’s counsel’s genuine persistence — pursuing the case after the government declined and moved to dismiss — though admirable, was the kind of effort the lodestar’s hours component already rewards. (Id. at pp. 707–708.)
3. This record did not present the rare and exceptional case. Measuring the award against that standard, the court found nothing showing the lodestar was unreasonably low or that some objective factor went uncaptured. (172 F.4th at pp. 706–707.) Departures “are to be rare and exceptional,” and this was an ordinary, if hard-fought, fee-shifting case. (Id. at p. 707.)
4. The multiplier was also unreviewable. Even apart from the merits, the court faulted the methodology: the district court’s selection of a 1.75 multiplier was not tethered to a transparent, reviewable rationale, leaving the appellate court unable to test it. (172 F.4th at p. 713.) That alone “is an independent reason to reverse the enhancement.” (Ibid.) Judge M. Smith concurred that the lodestar generally governs but dissented in part as to the disposition of the particular multiplier. (Id. at pp. 707–708, 713.)
Significance
Although Thrower arises in a False Claims Act qui tam action rather than a conventional employment case, it matters to employee-side and whistleblower practitioners because FCA relators are frequently current or former employees, and fee-shifting statutes — FCA, FEHA, the Labor Code, and the federal civil-rights statutes alike — share the lodestar framework. The decision is a firm reminder that above-lodestar multipliers are disfavored and reserved for genuinely exceptional circumstances, that they cannot be justified by the complexity, risk, or quality already reflected in the base award, and that any enhancement must rest on a transparent, reviewable methodology. For counsel who take risky contingency cases — including whistleblower and retaliation matters — the practical lesson is to build the value of the work into a well-documented lodestar (rate and hours), rather than to rely on a discretionary multiplier that an appellate court is likely to scrutinize and may reverse.
Key quotes
“Given the comprehensive nature of the lodestar calculation, any enhancements are rare and exceptional. … [A] multiplier may be awarded only upon specific evidence that the lodestar fee is unreasonably low … .” (Thrower, supra, 172 F.4th at pp. 706–707.)
“Because the district court’s choice of a 1.75 multiplier lacked an adequately reviewable methodology, it is an independent reason to reverse the enhancement.” (Thrower, supra, 172 F.4th at p. 713.)
Read the full opinion (U.S. Court of Appeals, Ninth Circuit) →
Practice pointer
When seeking statutory fees — in FCA, FEHA, or other fee-shifting cases in federal court — put your value into the lodestar, not a multiplier. Document a defensible market rate and reasonable hours, because Thrower confirms that an above-lodestar enhancement is “rare and exceptional” and cannot rest on the difficulty of the case, the risk of nonpayment, or the quality of representation already captured in the base award. If you do seek a multiplier, build a record of “specific evidence that the lodestar fee is unreasonably low” and articulate a transparent, reviewable methodology for the figure you request — an unexplained number invites reversal on that ground alone. Defense counsel challenging a fee award should press both points: that the enhancement double-counts lodestar factors, and that the court failed to show its work. (172 F.4th at pp. 706–707, 713.)
Open questions
The court reversed and remanded the multiplier without foreclosing every conceivable enhancement, leaving the district court to recalculate fees and, if it again departs from the lodestar, to supply the “specific evidence” and reviewable methodology the opinion requires. (172 F.4th at pp. 707, 713.) The opinion does not decide precisely what objective showing would render a lodestar “unreasonably low” in an FCA contingency case, an issue on which Judge M. Smith’s partial dissent signaled disagreement about the disposition. (Id. at pp. 707–708, 713.) And while the lodestar framework is shared across fee-shifting statutes, the decision does not address whether California’s state-law fee-multiplier practice under statutes like FEHA — which expressly contemplates enhancement for contingent risk — diverges from the federal approach it applies. (Id. at pp. 706–707.)