9. Equal Access to Justice Act

• Pages: 509-547

509

EQUAL ACCESS TO JUSTICE A CT

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Equal Access

to Justice

Act

509

Citations:

5 U.S.C. §504, 504 note (2000) and 28 U.S.C. §2412, 2412 note (2000);

enacted October 21, 1980 as title II of the Small Business Export Expansion

Act of 1980, Pub. L. No. 96-481, 94 Stat. 2325; amended September 3,

1982, by Pub. L. No. 97-248, title II, §292, 96 Stat. 574; August 5, 1985, by

Pub. L. No. 99-80, 99 Stat. 183; October 21, 1986 by Pub. L. No. 99-509,

title VI, §6103(c), 100 Stat. 1948; November 10, 1988 by Pub. L. No. 100-

647, title VI, §6239(b), 102 Stat. 3746; October 29, 1992 by Pub. L. No.

102-572, §506, 106 Stat. 4506, 4513; November 16, 1993 by Pub. L. No.

103-141, 107 Stat. 1489; December 21, 1995 by Pub. L. 104-66, title I, Sec.

1091(b), 109 Stat. 722; March 29, 1996 by Pub. L. No. 104-121, 110 Stat.

862.

Lead Agencies:

General oversight: Office of the Chief Counsel for Advocacy, U.S. Small

Business Administration, 409 Third Street SW, Washington, DC 20416 (202)

205-6533. [Note: the Administrative Conference of the United States, which

was given reporting responsibility for administrative proceedings, was termi-

nated in 1995. The Administrative Office of the United States Courts was

originally given reporting responsibility for judicial proceedings. The Attor-

ney General was substituted in 1992, but this provision (28 U.S.C. §2412(d)(5))

was deleted in 1995.]

Overview:

Eligibility and Coverage. The Equal Access to Justice Act provides that

certain parties who prevail over the federal government in covered litigation

are entitled to an award of attorneys’ fees and other expenses unless the gov-

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ernment can demonstrate that its position was substantially justified or that

special circumstance would make an award unjust. The parties eligible to

receive such awards include individuals whose net worth (at the time the

adjudication was initiated) is not more than $2 million; businesses, organiza-

tions, associations or units of local government with a net worth of no more

than $7 million and with no more than 500 employees; and tax exempt orga-

nizations and agricultural cooperatives with no more than 500 employees,

regardless of net worth. This must be shown by adequate affidavits. See Al

Ghanim Combined Group Co. Gen. Trad. & Cont. W.L.L. v. United States, 67

Fed. Cl. 494 (Fed. Cl. 2005). See also Tri-State Steel Construction Co. v.

Herman, 164 F.3d 973 (6th Cir. 1999) (corporate subsidiary may qualify for

recovery under the EAJA, even if it is owned by a parent far too substantial to

fit below the net worth limitations). The 1996 Amendments also allow “a

small entity” (as defined in the Regulatory Flexibility Act, 5 U.S.C. §601(6))

to utilize the new “excessive demand” avenue of relief, see discussion below

in “showing required.”

The Act covers two groups of proceedings: (1) adversary administrative

adjudications, which are defined to include formal hearing proceedings un-

der 5 U.S.C. §554 (other than licensing and ratemaking proceedings, but

including license suspension or revocation proceedings) in which the agency

takes a position as a party at the proceeding, government contract appeals

adjudicated under the Contract Disputes Act of 1978 (41 U.S.C. §§601-613),

administrative civil penalty proceedings under the Program Fraud Civil Rem-

edies Act (31 U.S.C. Chapter 38), and hearings under the Religious Freedom

Restoration Act of 1993; and (2) civil court actions other than tort cases (not

including tax cases, which are covered by a separate attorneys fee provi-

sion1). The Act also authorizes the award of attorneys’ fees against the United

States in those limited situations in which fees could be awarded against any

other party under existing common law and statutory provisions, unless a

statute expressly prohibits such an award.

Determining what constitutes an administrative proceeding “under” sec-

tion 554 has created some controversy, particularly with respect to deporta-

tion and other administrative immigration proceedings, which are conducted

with procedures equivalent to those required by section 554, even though

they are expressly exempted from the Administrative Procedure Act’s re-

126 U.S.C. §7430. This provision applies to cases commenced after Febru-

ary 28, 1983. Tax cases (other than those in the Tax Court) pending on October 1,

1981, or commenced between that date and March 1, 1983, are covered by the

Equal Access to Justice Act.

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quirements. The U.S. Supreme Court resolved this issue, ruling that proceed-

ings must be “subject to” section 554 to fall within the Act’s coverage (and

thus that administrative deportation proceedings are not covered). Ardestani

v. INS, 502 U.S. 129 (1991). In other contexts, many courts had already

reached a similar conclusion. See, e.g., Friends of the Earth v. Reilly, 966

F.2d 690 (D.C. Cir 1992) (EPA proceeding leading to withdrawal of autho-

rization for state hazardous waste program authorization not an adversary

adjudication where formal hearing was provided voluntarily under agency

regulations, rather than required by statute); Dart v. United States, 961 F.2d

284 (D.C. Cir. 1992) (Export Control Act proceedings not covered by EAJA

because exempt from §554 of APA); St. Louis Fuel & Supply Co. v. FERC,

890 F.2d 446 (D.C. Cir. 1989) (Department of Energy proceedings not cov-

ered by EAJA where formal hearing was provided voluntarily); Haire v. United

States, 869 F.2d 531 (9th Cir. 1989) (Department of Commerce enforcement

proceedings under the Export Administration Act not covered by EAJA be-

cause specifically exempted from §554 by statute); Owens v. Brock, 860 F.2d

1363 (6th Cir. 1988) (Department of Labor proceedings under the Federal

Employees Compensation Act not covered by EAJA); Olsen v. Dep’t of Com-

merce, Census Bureau, 735 F.2d 558 (Fed. Cir. 1984) (Merit Systems Protec-

tion Board proceeding concerning employee tenure not covered by EAJA);

Smedberg Machine & Tool, Inc. v. Donovan, 730 F.2d 1089 (7th Cir. 1984)

(labor certification review at Department of Labor not covered by EAJA).

But see Lane v. USDA, 120 F.3d 106 (8th Cir. 1997) (adjudications con-

ducted by hearing officers in the USDA’s National Appeals Division are “ad-

versary adjudications” covered by EAJA), and Collard v. U.S. Department of

Interior, 154 F.3d 933 (9th Cir. 1998) (although statute governing extin-

guishing of mining patent did not expressly call for formal APA adjudica-

tion, an APA hearing was constitutionally required; thus under Wong Yang

Sung v. McGrath, 339 U.S. 33 (1950) the hearing was governed by §554 for

the APA, making plaintiffs eligible for EAJA reimbursement).

The Supreme Court has significantly narrowed the definition of “pre-

vailing party” in federal fee shifting statutes. In Buckhannon Board & Care

Home, Inc. v. West Virginia Department of Health & Human Resources, 532

U.S. 598, 600 (2001), the Court held that a “party that has failed to secure a

judgment on the merits or a court-ordered consent decree, but has nonethe-

less achieved the desired result because the lawsuit brought about a voluntary

change in the defendant’s conduct” is not a “prevailing party” under federal

statutes allowing courts to award attorney’s fees and costs to the “prevailing

party.” Six circuit courts have found that Buckhannon applies to the EAJA.

See Morillo-Cedron v. Dist. Dir. for The U.S. Citizenship & Immigration