En banc 9th Circuit calls for new look at attorney fees in ‘No Fly’ list litigation

A San Jose plaintiffs' firm that successfully challenged a Stanford Ph.D. student's designation on the Transportation Security Administration's "No Fly" list will have a second chance to request attorney fees after more than 12 years of litigation.

On Wednesday, an en banc panel of the 9th U.S. Circuit Court of Appeals ruled U.S. District Judge William Alsup was wrong to slash a prior request submitted by McManis Faulkner following its victory in the unprecedented challenge, which marked the first time the federal government was forced to admit it listed an individual incorrectly.

The lengthy opinion, authored by Judge Kim McLane Wardlaw, said the government was not justified in defending the lawsuit because it knew Rahinah Ibrahim, a Malaysian citizen, posed no terrorist threat and had been placed on the watch list because of a clerical mistake.

Ibrahim's lawyers deserved significant compensation, the court said.

"The achievement of Dr. Ibrahim and her attorneys in successfully challenging her No Fly list placement and forcing the government to fix its error was not just 'excellent,' but extraordinary," Wardlaw wrote. Ibrahim v. DHS, 2019 DJDAR 4 (9th Cir. Jan. 2, 2019).

9th Circuit Judge Kim McLane Wardlaw

Over the course of more than a decade, the U.S. Department of justice "played discovery games, made false representations to the court, misused the court's time, and interfered with the public's right of access to trial," Wardlaw said.

In 2004, an FBI special agent accidentally listed Ibrahim, then at Stanford on a student visa, on several security designation lists. After she left to visit her home in Malaysia in 2005, Ibrahim was barred from returning to the U.S. because of the improper listing.

She challenged the designation in federal court in a battle that lasted eight years and saw two trips to the 9th Circuit. In one of those rulings, the federal appeals court established precedent that foreigners with significant ties to the United States are entitled to certain due process rights.

Wardlaw noted the significant case law established during the course of the litigation.

"The significance of Dr. Ibrahim's roadmap cannot be overstated," Wardlaw wrote. "Any person could have the misfortune of being mistakenly placed on a government watch list, and the consequences are severe. ... Today, those misplaced on the No Fly list can contest that placement, and, if misplaced, regain their right to flight.

The San Jose-based firm McManis Faulkner represented Ibrahim during the litigation and requested more than $3 million in fees and nearly $300,000 in expenses under the Equal Access to Justice Act. But Alsup, who presided over the case, awarded a fraction of the request, ordering the government to pay McManis Faulkner $419,987.36 in fees and $34,768.71 in costs.

The 9th Circuit said Wednesday Alsup would need to recalculate that award. Previously, the San Francisco-based judge awarded fees in a piecemeal fashion, looking at the specific claims on which Ibrahim had succeeded. He denied a request to award compensation for time spent on legal theories unaddressed in the 2014 ruling.

9th Circuit Judge Consuelo M. Callahan

That approach was incomplete, the 9th Circuit said, because "all of Dr. Ibrahim's claims arose from a 'common course of conduct.'"

Dissenting from Wardlaw's majority opinion, Judge Consuelo Callahan, joined by two of her colleagues, said the court had gone too far. A federal appeals court should not find the government's positioning in the case was not substantially justified, she said.

Callahan further complained that the majority improperly reversed Alsup's decision to limit the attorney fee rate to $125 per hour, as outlined by the Equal Access to Justice Act.

James McManis hailed the ruling as a victory during a phone interview Wednesday and said the decision was a "well-deserved rebuke to the United States government."

"I'm very proud of the lawyers here who worked on this case," McManis said. "We've had it for over 10 years and have spent more than $3.6 million worth of attorney time. It was very gratifying to get that opinion."

The Justice Department did not respond to a request for comment.