Congress bilked D.C. solo practitioner Mark Zaid out of $466,000 when it passed a private relief bill that awarded $2 million to Zaid’s clients while restricting his contract-backed contingency arrangement, a lawyer for Zaid argued today in the U.S. Court of Federal Claims.
The lawyer, D.C. solo Eric Imperial, argued that Congress unlawfully altered the terms of Zaid’s contract with the two clients, Eugene and Barbara Makuch, who had reportedly agreed to pay Zaid a third of any award they received. The private relief bill restricted Zaid’s compensation to 10 percent. That amounts to a property taking under the Fifth Amendment, Imperial argued. A copy of Zaid's complaint is here.
At issue in the case is whether Zaid had a property interest before Congress passed the private relief bill in 2002 to award $2 million to the Makuches, who worked with the FBI during the Cold War to thwart Soviet spy activity. Since there was no property before the legislation passed, there was nothing for Zaid to have an interest in, contended Robert Chandler of the Justice Department’s commercial litigation branch.
The complaint, Chandler argued, fails to establish a taking. The government and the public at large, he said, did not gain from the legislation. “Here there is clearly no public use,” he said. “There was no benefit conferred on the government. There was no benefit conferred directly on the public.” Chandler argued the legislation did not go to the contract but to the use of the funds awarded to Zaid’s clients.
That argument does not carry much weight, Imperial said. Zaid “worked for four years and he was successful, and he’s entitled to be paid for that,” Imperial argued. “This is his property right. It’s his right to be paid by his clients.”
Imperial appeared to win favor with Judge Thomas Wheeler. “Congress passed a law that directly affected the contract right Mr. Zaid had,” Wheeler said in court.
Wheeler questioned Chandler about a memo written by an assistant attorney general in 2001 stating that if the Makuches owe a lawyer more than 10 percent, an attempt by Congress to deprive the lawyer the full fee might be considered a taking under the Fifth Amendment. The memo, Wheeler said, contradicts the Justice Department position. Chandler said the memo does not represent the “well thought-out views” of the government at the time.
At the end of the hour-long hearing, Wheeler said it appears "fairness and equity" are on Zaid’s side. The judge seemed inclined to deny the government’s motion to dismiss, and he explored the extent to which Zaid and the Justice Department have entertained settlement talks. “Anytime the government wants to talk we’re happy to sit down,” Imperial said. A settlement, Chandler said, is likely to be a “tough sell” for Justice.