Gwen Thrower, a former mortgage underwriter for Academy Mortgage Corporation, sued her employer under the False Claims Act in 2016, alleging the lender falsely certified compliance with Federal Housing Administration regulations while participating in the Direct Endorsement program. After years of litigation, the parties settled for $38.5 million in January 2023, with nearly $27 million going to the Treasury and the remainder to Thrower. However, the settlement expressly excluded Thrower's claim for attorneys' fees, which remained pending before the district court.
The dispute centered on when postjudgment interest began accruing on the $8.6 million in attorneys' fees ultimately awarded to Thrower. As Circuit Judge Bumatay explained, 'Under the law, interest is allowed on any money judgment and shall be calculated from the date of the entry of the judgment,' citing 28 U.S.C. § 1961(a). The court held that because the January 2023 settlement order 'expressly carved out Thrower's claims for attorneys' fees from dismissal' and provided no definite amount Academy owed, it could not constitute a money judgment for purposes of calculating interest.
The panel delivered sharp language rejecting policy arguments from other circuits that favor starting interest from entitlement rather than when fees are quantified. 'These policy considerations are unfounded,' Judge Bumatay wrote, noting that 'any losses attorneys may suffer from a delay between a merits judgment and a judgment quantifying attorneys' fees can be incorporated into the calculation of those fees.' The court emphasized that the Supreme Court's decision in Kaiser requires treating § 1961's text as 'conclusive' rather than bending to policy concerns.
The case reached the Ninth Circuit after U.S. District Judge Edward M. Chen of the Northern District of California awarded Thrower $8,585,530.20 in attorneys' fees and $89,437.77 in expenses in May 2024—sixteen months after approving the settlement. Judge Chen ruled that postjudgment interest accrued from the May 2024 fee award, not the January 2023 settlement order, prompting Thrower's appeal.
Thrower had argued that interest should run from the settlement date because the False Claims Act mandates fee awards for successful whistleblowers, citing language from Friend v. Kolodzieczak that 'interest runs from the date that entitlement to fees is secured, rather than from the date that the exact quantity of fees is set.' But the panel rejected this argument, noting that the quoted language came from a district court opinion attached as an appendix and was never actually decided by the circuit court. 'Questions which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are not to be considered as having been so decided as to constitute precedents,' Judge Bumatay wrote.
The decision puts the Ninth Circuit at odds with the Fifth, Sixth, Eighth, and Eleventh Circuits, which generally allow postjudgment interest to accrue from when a party becomes unconditionally entitled to fees. However, the panel aligned with the Third, Seventh, and Tenth Circuits in requiring that a money judgment specify both the parties and 'a definite and certain designation of the amount which plaintiff is owed by defendant' before interest begins running. The court noted that any compensation concerns for attorneys can be addressed by 'basing the award on current rates or by adjusting the fee based on historical rates to reflect its present value.'
The ruling clarifies that in False Claims Act cases where settlements are approved separately from attorney fee determinations, whistleblowers cannot claim postjudgment interest for the extended period between settlement and fee awards. For practitioners handling qui tam actions, the decision underscores the importance of either securing specific fee amounts as part of settlement negotiations or ensuring that delay compensation is built into the ultimate fee calculation through current billing rates or present value adjustments.