The dispute centers on how to divide a nearly $789,000 attorney's fee award in True the Vote Inc.'s 13-year lawsuit against the Internal Revenue Service. After True the Vote switched law firms mid-litigation in 2017, both the original attorneys and the Bopp Law Firm claimed liens on the fee award when the district court resolved the case under the Equal Access to Justice Act. The Former Attorneys — Foley & Lardner, the Public Interest Legal Foundation, and the Center for Constitutional Jurisprudence — claim they are entitled to almost $640,000, while Bopp claims it deserves more than $500,000 based on its billing records and fee agreement.
The D.C. Circuit vacated the district court's denial of Bopp's charging lien motion, finding the lower court misinterpreted Indiana law governing such claims. As Walker explained, Indiana's framework established in the 1897 case Koons v. Beach creates two separate paths for establishing a charging lien: either showing 'that an attorney secured the client's fund' or showing 'that the client agreed to pay the attorney from that fund.' The court emphasized that under this standard, 'In either event,' the attorney has an equitable charging lien.
Walker delivered sharp criticism of the district court's legal analysis, writing that it 'erred by requiring Bopp to satisfy both parts of the Koons II framework — which, again, is an either/or framework.' The appeals court characterized this mistake as 'understandable in light of the paucity of recent and relevant Indiana authorities' but nonetheless requiring reversal.
The case began in 2013 when True the Vote sued the IRS, with the Former Attorneys handling the litigation until 2017. The Bopp Law Firm then took over representation until the district court issued a consent order resolving the claims in 2018. More than a year later, the court awarded the substantial EAJA fee award, triggering the dispute over how to divide the money among the competing law firms.
The district court had rejected Bopp's lien claim after determining that Indiana law required proof 'that there was some agreement, express or implied, that the attorney's compensation would come from that fund, rather than from the client's personal obligation to pay the attorney.' But the D.C. Circuit found this analysis incomplete, noting that the court failed to consider whether Bopp could establish a lien under the alternative theory that its services helped create the fund.
The appeals court left several complex issues for resolution on remand, including whether Bopp can establish a lien under the first prong of the Indiana framework and questions about lien priority if multiple firms have valid claims. The court also noted that 'the fee award is not a pool of money that was won through the efforts of a settlement or damages award, but rather is meant to compensate attorneys for specific billings,' potentially complicating Bopp's argument that it deserves more than its proportionate share of the EAJA calculation.
Walker concluded with a plea for swift resolution, noting that the court hoped the district court 'can quickly bring this thirteen-year-old case to a close.' The ruling returns the fee dispute to the trial court for reconsideration under the correct legal standard, potentially reshuffling how nearly three-quarters of a million dollars in attorney's fees will be distributed among the competing law firms.