United States District Court, N.D. California
ORDER RE RESTITUTION DOCKET NOS. 628, 634,
M CHEN United States District Judge
David Nosal was found guilty of, inter alia,
violating the Computer Fraud and Abuse Act
(“CFAA”). This Court originally sentenced Mr.
Nosal to one year and one day in prison, three years of
supervised release, a $60, 000 fine, a $600 special
assessment, and approximately $828, 000 in restitution to
Korn/Ferry International (“KFI”), the victim of
the crimes. The restitution award had three components: (1)
$27, 400 represented KFI's costs incurred in attempting
to ascertain the nature and scope of Mr. Nosal's
misconduct; (2) approximately $247, 700 represented the value
of KFI's employee time spent participating in and
assisting the government's investigation and prosecution;
and (3) approximately $595, 800 represented the
attorney's fees incurred by KFI in aid of the
investigation or prosecution of the offense. With respect to
(3), the government had asked for a significantly higher
amount - approximately $964, 900 - but the Court reduced the
fee component “for invoices 'not demonstrably
reasonably necessary to the government's investigation
and prosecution, ' for 'staffing inefficiencies,
' and for 'time spent on “press” and
file/order reviewing charges.'” United States
v. Nosal, 844 F.3d 1024, 1046 (9th Cir. 2016).
Nosal appealed the conviction and sentence to the Ninth
Circuit. In December 2016, the Ninth Circuit largely affirmed
this Court's rulings but remanded with respect to the
restitution award - more specifically, component (3) above
related to attorney's fees. On remand, the government
reduced its request to approximately $458, 000 while Mr.
Nosal argued that restitution for fees should be $0 but, at
the very least, no more than approximately $55, 000. The
Court held a hearing but did not decide the issue at that
time, instead giving the parties additional guidance and then
directing them to meet and confer. The parties have now met
and conferred and their dispute has narrowed. The government
now asks for an award of approximately $183, 000 (covering an
eight-year period, from July 2005 to January 2014); Mr. Nosal
asks that the award be limited to approximately $60, 000. The
parties have provided a spreadsheet which shows, inter
alia, the attorney time entries, where the government
seeks compensation, and where Mr. Nosal objects.
considered the Ninth Circuit's remand order, the
parties' post-remand briefs, the spreadsheet, the oral
argument of counsel, and all other evidence of record, the
Court hereby finds that the proper amount for restitutionary
attorney's fees is $163, 766.18.
Ninth Circuit Remand Order
in the instant case is governed by the Mandatory Victim
Restitution Act (“MVRA”). See 18 U.S.C.
§ 3663A. The Act provides in relevant part that a
“court shall order, in addition to . . . any other
penalty authorized by law, that the defendant make
restitution to the victim of the offense.” Id.
§ 3663A(a)(1). Victim is defined as one “directly
and proximately harmed as a result of the commission of [the]
offense.” Id. § 3663A(a)(2). “The
order of restitution shall require that [the] defendant . . .
reimburse the victim for lost income and necessary child
care, transportation, and other expenses incurred during
participation in the investigation or prosecution of the
offense or attendance at proceedings related to the
offense.” Id. § 3663A(b)(4). “Any
dispute as to the proper amount or type of restitution shall
be resolved by the court by the preponderance of the
evidence.” Id. § 3664(e).
remand order, the Ninth Circuit noted that “other
expenses” for purposes of § 3663A(b)(4) can
include attorney's fees. However, there are certain
• “[T]he fees must be the direct and foreseeable
result of the defendant's conduct.” Nosal,
844 F.3d at 1047.
• It must have been “'reasonably necessary for
[the victim] to incur attorneys' . . . fees to
participate in the investigation or prosecution of the
• The fees must be reasonable - e.g., there
should be no award for “duplicate effort” or
“time that is disproportionate to the task.”
Id. at 1048.
• The fees must reflect participation in the
investigation or prosecution of the offense -thus, the
attorneys' work is not a substitute for the work of the
prosecutor and it does not duplicate the work of the
prosecutor. See Id. (regarding the latter, referring
to a “shadow prosecutor”).
regard to Mr. Nosal's case specifically, the Ninth
Circuit stated that,
[e]ven after reduction [i.e., by this Court], the
total amount of fees awarded is striking, particularly given
that the trial ultimately involved only three discrete
incidents of criminal behavior. Although resulting in
multiple counts, at bottom the events were temporally
circumscribed and limited in scope. We note that a highly
disproportionate percentage of the fees arose from responding
to requests and inquiries related to sentencing, damages, and
restitution. The reasonableness of the fees needs to be
reexamined to consider (i) whether the sizeable fee related
to restitution matters was reasonable; (ii) whether there was
unnecessary duplication of tasks between [KFI] staff and its
attorneys since the [district] court awarded a substantial
sum [almost $250, 000] for the time of [KFI] employees; and
(iii) whether the outside attorneys were substituting or
duplicating the work of the prosecutors, rather than serving
in a participatory capacity.
Categories of Disputes
indicated above, the parties have significantly narrowed
their dispute regarding restitutionary attorney fees, with
the governing now asking for an award of approximately $183,
000 and Mr. Nosal asking that the award be limited to
approximately $60, 000. The Court has reviewed the
spreadsheet submitted by the parties, which reflects each
time entry in dispute. Based on the Court's review of the
spreadsheet, the subject matters of the disputes largely fall
into one of the following categories
(1) Time spent on responding to government subpoenas.
(2) Time spent following up on issues identified by the USAO
(3) Time spent in conferences with Ms. Briski (a KFI
(4) Time spent attending trial.
(5) Time spent on post-trial matters such as loss and
the Court addresses each category. The Court then addresses
some disputed time entries that do not fall ...