Equal Employment Opportunity Commission v. complete Dewatering, Inc
 00-12967-E


 IN THE UNITED STATES COURT OF APPEALS
 FOR THE ELEVENTH CIRCUIT



 No. 00-12967-E



 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

  Plaintiff-Appellant,

 v.

 COMPLETE DEWATERING, INC.; COMPLETE DEWATERING PUMPS AND WELLPOINTS,
 INC.,

  Defendants-Appellees.



 On Appeal from the United States District Court
 for the Southern District of Florida



 BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY
 COMMISSION AS PLAINTIFF-APPELLANT



         C. GREGORY STEWART
         General Counsel

         PHILIP B. SKLOVER
         Associate General Counsel

         LORRAINE C. DAVIS
         Assistant General Counsel

         ROBERT J. GREGORY
         Senior Attorney

         EQUAL EMPLOYMENT OPPORTUNITY
            COMMISSION
         1801 L Street, N.W.
         Washington, D.C. 20507
         (202) 663-4059

 STATEMENT OF JURISDICTION

  This is a public enforcement action brought by the Equal Employment
  Opportunity Commission ("Commission") pursuant to Section 7(b) of
  the Age Discrimination in Employment Act of 1967, 29 U.S.C.  621 et
  seq. ("ADEA").  The district court had jurisdiction of the case under
  28 U.S.C.  1331 and 1345.  The district court entered an order on
  April 5, 2000, awarding approximately $215,000 in attorney's fees to the
  defendants, Complete Dewatering, Inc. and Complete Dewatering Pumps &
  Wellpoints, Inc. (referred to collectively as "Complete Dewatering").
  Doc.152.  This order disposed of all claims with respect to Complete
  Dewatering's request for attorney's fees under the Equal Access to
  Justice Act, 28 U.S.C.  2412 ("EAJA").  The Commission filed a timely
  notice of appeal on June 2, 2000.  Doc.154; see F.R.A.P. 4(a)(1).
  This Court has jurisdiction of the district court's final order on
  attorney's fees under 28 U.S.C.  1291.  See Fort v. Roadway Express,
  Inc., 746 F.2d 744, 747 (11th Cir. 1984) (award of attorney's fees is
  an appealable order that becomes final once the district court sets
  the amount of fees).   STATEMENT OF THE ISSUES
  1.  Whether the EAJA's "substantially justified" standard supersedes the
  specific fee-shifting standard adopted in the ADEA, which authorizes the
  award of attorney's fees to prevailing defendants under a restrictive
  "bad faith" standard, where the "substantially justified" standard,
  by its plain terms, does not apply to statutes that have their own
  fee-shifting provisions, where the ADEA's fee-shifting provision reflects
  a congressional intent to restrict severely the award of attorney's
  fees to prevailing defendants, and where Congress, in enacting the
  EAJA, intended to except civil rights statutes from the reach of the
  "substantially justified" standard.
  2.  Whether the Commission had a reasonable basis in law and fact for
  maintaining its ADEA action such that attorney's fees could not be
  properly awarded under the EAJA's "substantially justified" standard.
  3.  Whether the "special circumstances" exception to the award of
  attorney's fees under the EAJA's "substantially justified" standard
  applies in this case, where Complete Dewatering, at the merits stage,
  misled both the district court and the court of appeals on issues
  critical to the disposition of the case.

 STATEMENT OF THE CASE

  1.  Nature of the Case
  This is a case of age discrimination brought by the Commission against
  Complete Dewatering.  The Commission alleges that Complete Dewatering
  violated the ADEA by discharging the charging party, Al Winnemore,
  the branch manager of Complete Dewatering's Davie facility.  Complete
  Dewatering successfully defended this action at the merits stage.
  The Commission appeals from an order of the district court awarding
  attorney's fees to Complete Dewatering under the EAJA.
  2.  Course of Proceedings
  The Commission commenced this action in May 1992.  Doc.1.  Complete
  Dewatering moved for summary judgment in February 1997.  Doc.64; Doc.67.
  By order dated May 23, 1997, the district court granted Complete
  Dewatering's motion.  Doc.109.  This Court affirmed the district
  court's grant of summary judgment in an unpublished opinion dated July
  19, 1999.<1>  By order dated January 13, 2000, this Court denied the
  Commission's petition for panel rehearing.
  Complete Dewatering filed a petition for attorney's fees in the district
  court in June 1997.  Doc.111.  The petition was referred to a magistrate
  judge.  The magistrate issued a report and recommendation on March 9,
  1998, recommending that Complete Dewatering's petition for attorney's
  fees be denied.  Doc.131.  On April 23, 1998, the district court judge
  issued an order reversing the magistrate's report and recommendation
  and remanding the case to the magistrate judge for further proceedings
  on the fees issue. Doc.135.  The magistrate judge issued a report and
  recommendation on March 16, 2000, recommending that attorney's fees be
  awarded in the amount of $167,333.74 to Complete Dewatering, Inc. and
  $48,168.85 to Complete Dewatering Pumps & Wellpoints, Inc.  Doc.150.
  By order dated April 5, 2000, the district court judge affirmed the
  magistrate's report and recommendation.  Doc.152.
  3.  Statement of Facts
  Al Winnemore worked for Complete Dewatering as the branch manager of
  its Davie facility.  Doc.71-Pgs.21-23.  In August 1991, Winnemore filed
  a charge of age discrimination with the Commission.  Doc.117-Exh.1.
  Winnemore alleged that he been discharged from his job with Complete
  Dewatering "with no real reason given" and "replaced by a much younger
  individual with no experience in the business."  Doc.117-Exh.1.
  The Commission sent the charge to Complete Dewatering, which provided
  a formal position statement to the Commission.  Doc.117-Exh.4.  In that
  position statement, Complete Dewatering denied that Winnemore had been
  discharged because of his age.  Doc.117-Exh.4.  Complete Dewatering
  asserted that Winnemore left Complete Dewatering's employ after
  Complete Dewatering eliminated Winnemore's salary and began paying him
  on a commission-only basis.  Doc.117-Exh.4.  Complete Dewatering stated
  that the company officials involved in the decision to alter Winnemore's
  employment status were Fred Share and Steve Mogle.  According to Complete
  Dewatering:
 A decision was made by Mr. Fred Share (date of birth 9/23/54),
 a shareholder of the company, and Mr. Steve Mogle (date of birth:
 3/30/47), the then president of the company, to attempt to salvage the
 branch. . . . Mr. Share and Mr. Mogle visited Mr. Winnemore and advised
 him basically that in order to save the branch, he would have to go
 on a commission basis . . . in the same manner as the other managers,
 and that if he did so he could continue his job after certain other
 personnel cuts were made.  He said he would think about it, and contacted
 Mr. Mogle later on with a counterproposal that would have required the
 company to pay him more than the existing plan.  The counterproposal was
 understandably rejected . . . Mr. Mogle began operating the branch as
 an additional duty until much later, when a replacement [for Winnemore]
 was found.  The replacement [was] Robert Freeze (date of birth: 3/4/42).

 Doc.117-Exh.4.

  The Commission investigated Winnemore's charge.  The Commission found
  cause to believe that Winnemore had been terminated because of his age.
  The Commission determined that the evidence did not support Complete
  Dewatering's contention that Winnemore left the employ of Complete
  Dewatering when the company "decided to change his method of compensation
  as it had done for other employees at his level."  Doc.117-Exh.5.
  The Commission stressed that the "evidence shows that [Winnemore's]
  younger successor was not treated in this manner."  Doc.117-Exh.5.
  The Commission's subsequent attempts to conciliate the charge failed.
  The Commission brought suit under the ADEA in May 1992.  Doc.1.
  The Commission conducted extensive discovery in the district court.
  That discovery revealed substantial evidence of age discrimination.
  First, the Commission uncovered direct evidence of discrimination in the
  form of age-biased comments made by Steve Mogle.  At one point, Mogle
  was asked by another company official, Jerome Golden, why Winnemore
  had been terminated.  This official expressed the view that Winnemore
  "was a good man and did a great job."  Doc.77-Pg.17.  Mogle responded
  that he had "let [Winnemore] go" because Winnemore "was over the hill."
  Doc.77-Pgs.16-18.  Mogle also explained to this official, in another
  conversation, that the company needed to make changes in personnel
  in order to build a "young organization."  Doc.77-Pgs.18-19.  Mogle
  suggested to Winnemore himself that the termination was justified because
  Winnemore "should be about ready to retire anyway."<2>  Doc.71-Pg.49.
  Although Complete Dewatering had previously identified Mogle as a
  decision-maker (in its position statement), the Commission took care
  to uncover independent, corroborating evidence of Mogle's role in the
  decision to terminate Winnemore's employment.  This evidence was critical
  because Mogle's discriminatory statements would have diminished probative
  value if Mogle played no role in the termination decision.  The evidence
  linking Mogle to the decisional process was as follows.
  Complete Dewatering first retained Mogle's services in February 1990.
  Doc.72-Pgs.14,36-37; Doc.73-Pgs.16,24.  At that time, Fred Share was
  CEO of the company.  Doc.72-Pg.12.  Mogle was brought in to "make a lot
  of decisions" for Share and the board of directors concerning changes
  in the workforce.  Doc.77-Pgs.14-16.  Mogle played a central role in
  employment decision-making during the months of February and March 1990.
  Mogle, in particular, made recommendations to Share concerning which
  employees should be let go.  Doc.73-Pg.16.  At least 40 employees
  were terminated during the months of February and March on Mogle's
  recommendation.  Doc.73-Pg.16; see also Doc.77-Pgs.14-16 [Deposition
  of General Manager Jerome Golden] (stressing that Mogle was active in
  employment decision-making as soon as he came on board); Doc.117-Exh.4
  [position statement of Complete Dewatering](acknowledging that Mogle
  had the title of  company "president" as early as March 1990).
  Winnemore was one of the individuals targeted by Share and Mogle.
  Share met with Winnemore in March 1990 to discuss the company's idea of
  placing Winnemore on a commission-only payment system.  Doc.71-Pgs.45-46;
  Doc.72-Pgs.24,37.  Share brought Mogle to the meeting with Winnemore.
  Doc.73-Pg.27.  Share motioned toward Mogle, telling Winnemore that
  Mogle's "going to be in charge" and there "are going to be a lot of cuts
  coming."  Doc.72-Pg.36.  Mogle sat outside the office door while Share
  met with Winnemore.  Doc.73-Pg.27.  During the meeting, Share informed
  Winnemore that the idea for the shift to the commission-only payment
  structure had been Mogle's.  Specifically, "Mogle had made the decision
  that they could phase this out and go into an independent contractor
  deal and everything would be fine."  Doc.71-Pg.61.  The meeting ended
  with Winnemore's employment status still up in the air.  Doc.72-Pg.36
  [Deposition of Fred Share] (stating that when he met with Winnemore in
  March 1990, he did not believe that Winnemore had to be "cut").
  On April 1, Mogle officially assumed the position of CEO.  Doc.65-Pg.8;
  Doc.72-Pg.18.  At that point, Winnemore was still performing the same
  kinds of jobs that he had always performed for Complete Dewatering,
  visiting contractors, "renting and selling equipment every day," and
  "supervising installations."  Doc.71-Pg.48.  At some point in April,
  Winnemore tendered a counter-proposal to Mogle's commission-only
  payment scheme.  Doc.71-Pgs.47-48.  Mogle "looked through [the proposal]
  and said, well, you know, we will have to go over it.  I will go over
  it with Fred [Share] and get right back with you."  Doc.71-Pg.48.
  Mogle met with Winnemore in early May 1990.  Mogle informed Winnemore
  that he had been terminated from his job because "[w]e just don't need
  you any longer."  Doc.71-Pgs.32,49.  Mogle explained that there was
  "nothing to work out" and that Winnemore should "go back and clean out
  [his] desk."  Doc.71-Pg.49.
  In addition to uncovering direct evidence of discrimination -- in the
  form of age-discriminatory statements made by a key decision-maker --
  the Commission also uncovered evidence that Winnemore was replaced by
  a succession of younger managers.  When Mogle instructed Winnemore to
  "clean out [his] desk" because "[w]e just don't need you any longer,"
  he also informed Winnemore that the company had "just replaced [him]"
  with "a man in your office down there now that Frank Hornbrook took
  down to introduce him to Dominic [Cipully]."  Doc.71-Pg.49.  That same
  day, Hornbrook showed up at Winnemore's facility with Timothy Fruits.
  Hornbrook introduced Fruits to Cipully by saying that Fruits "was
  taking [Winnemore's] job."  Doc.76-Pgs.15,16,61-62.  Fruits moved into
  Winnemore's office and assumed a number of Winnemore's duties as branch
  manager.  Doc.76-Pgs.15-17,61.  Fruits was 26 years old.  Doc.78-Pg.4.
  As it turned out, Fruits lasted only a few weeks on the job.
  The company then installed Cipully in the branch manager position.
  Doc.76-Pgs.26,29-30.  Cipully, age 53 (Doc.76-Pg.4), performed the
  duties of branch manager for several months.  Doc.76-Pgs.29-30,64.
  In January 1991, the company hired Robert Freeze, age 48, to assume the
  branch manager position on a permanent basis.  Doc.75-Pgs.5,7.  Fruits,
  Cipully, and Freeze were each paid on a salary basis.  Doc.72-Pg.45;
  Doc.75-Pgs.10-11; Doc.76-Pgs.26,29-31; Doc.78-Pgs.15-16.  Freeze's annual
  salary, as branch manager, was almost twice the salary paid to Winnemore
  when he occupied the branch manager position.  Doc.75-Pgs.10,11-13
  (showing that Freeze was paid a base salary plus a "commission based on
  revenue," amounting to $64,000 in annual compensation); Doc.71-Pgs.39-40
  (showing that Winnemore was paid a weekly salary of $650 plus bonuses
  that totaled approximately $3,250 annually).
  Despite these proofs, Complete Dewatering moved for summary judgment.
  The linchpin of Complete Dewatering's motion was that the evidence
  of discriminatory bias uncovered by the Commission was irrelevant
  because Mogle played no role in the decision to terminate Winnemore.<3>
  Doc.66-Pgs.10-11.  Complete Dewatering took this position despite its
  earlier representation to the contrary in its formal position statement
  provided to the Commission.  Complete Dewatering took this position
  despite the clear record evidence that Mogle was intimately involved
  in Winnemore's termination at every step of the decisional process.<4>
  Complete Dewatering also argued that the Commission's claim failed
  because the Commission could not satisfy the replacement element
  of the McDonnell Douglas prima facie case.  Complete Dewatering
  asserted that Timothy Fruits was not in fact Winnemore's replacement,
  characterizing the Commission's evidence on this point as "conclusory,"
  "speculative," and the product of "double hearsay."  Doc.66-Pgs.11-12.
  Although contesting Fruits' status as a replacement for Winnemore,
  Complete Dewatering conceded that Dominic Cipully replaced Winnemore
  in the branch manager position.  See Doc.65-Pgs.6,10-11 [Complete
  Dewatering's Statement of Undisputed Material Facts] (stating that
  "just days" after Winnemore's termination, Cipully was advised that he
  "would be assuming the branch manager duties of the Davie [Winnemore's]
  facility"; stating that the "uncontroverted testimony" showed that "it
  was Cipully who assumed the branch manager duties while maintaining his
  prior yard duties after Winnemore's termination;" stating that Cipully
  was "acting branch manager" until Robert Freeze was hired in January
  1991); Doc.66-Pg.2 [Complete Dewatering's Memorandum in Support of Motion
  for Summary Judgment] (stating that, following Winnemore's termination,
  Cipully "assumed the branch manager duties of the Davie facility").
  Cipully's status as Winnemore's replacement was explicitly confirmed
  by both Share and Mogle.  Share testified in his deposition that
  when Winnemore was let go, "the person that we left in charge of the
  branch at that time became the, quote, branch manager."  Doc.72-Pg.42.
  That person was Cipully.  Doc.72-Pg.42.  Mogle testified that Cipully
  "was the person that really was the branch manager after [Winnemore]
  left the company."  Doc.73-Pg.43.  When asked point blank, "[a]re you
  saying then that [Cipully] was the one who replaced Al Winnemore?",
  Mogle replied, "[w]ell, if you really --
 yeah.  Dominic was given the title as branch manager.  He was the person
 that was in charge of making the day-to-day decisions in that office
 after Al Winnemore left."  Doc.73-Pgs.43-44.
      Complete Dewatering also conceded that Robert Freeze assumed  the
      position of branch manager, on a permanent basis, in January 1991.
      See Doc.65-Pg.11 [Complete Dewatering's Statement of Undisputed
      Material Facts] (stating that Freeze was hired "in or around January,
      1991" as "branch manager at the Davie facility").  This admission
      was consistent with Complete Dewatering's prior statement -- in
      its formal response to Winnemore's ADEA charge -- that Freeze was
      Winnemore's "replacement."  Doc.117-Exh.4.  There is no dispute
      that Freeze performed the same duties as branch manager as those
      performed by Winnemore when Winnemore occupied the very same branch
      manager position.
  Notwithstanding these concessions, Complete Dewatering urged that it
  was entitled to summary judgment on the replacement issue.  Complete
  Dewatering advanced no argument of any kind, in its memorandum in
  support of summary judgment, bearing on the replacement status of
  Cipully and Freeze.  In its statement of undisputed material facts,
  however, Complete Dewatering suggested that Cipully and Freeze could
  not be used to satisfy the replacement element of the prima facie
  case because both individuals, although substantially younger than
  Winnemore, were themselves over the age of 40 and, thus, members of
  the protected class.  See Doc.65-Pgs.6-7,11 (stressing that "Cipully
  was born on July 6, 1936 and was nearly 54 years old at the time [he
  assumed the branch manager position];" stressing that Freeze was "age
  forty-nine" when he was hired as Winnemore's replacement).
  Finally, Complete Dewatering argued that the Commission's case  failed,
  even assuming that the Commission could make out a prima facie case,
  because Complete Dewatering had legitimate, non-pretextual reasons for
  terminating Winnemore.  Complete Dewatering asserted that Winnemore had
  been let go because the company needed to eliminate his position in order
  to "cut fixed costs in the form of payroll expenditures."  Doc.66-Pg.13.
  Complete Dewatering urged that it needed to put somebody in the branch
  manager position who was willing to be paid on a commission-only
  basis.  Doc.66-Pg.19.  Complete Dewatering advanced its job-cutting
  explanation in the face of undisputed evidence that Winnemore's branch
  manager position was not eliminated.  Complete Dewatering advanced its
  commission-only explanation in the face of undisputed evidence that
  each of the individuals who succeeded Winnemore in the branch manager
  position was paid on a salary basis.  See supra p. 10.
  The district court granted Complete Dewatering's motion for summary
  judgment.  The court first ruled that the age-discriminatory statements
  attributed to Mogle lacked probative value because Mogle "was not the
  decision maker" with respect to Winnemore's termination.  Doc.109-Pg.6.
  In reaching this conclusion, the court found that Mogle "was not employed
  by Complete until August of 1990," well after Winnemore left the company.
  Doc.109-Pgs.6-7.  The court referenced the August 1990 date despite the
  undisputed evidence that Mogle was employed by Complete Dewatering as
  early as February 1990 and became Complete Dewatering's CEO in April
  1990.
  The district court also rejected the Commission's case under a McDonnell
  Douglas or pretext theory.  The court ruled that the Commission could
  not make out a prima facie case of discrimination because there was no
  evidence that Winnemore was replaced by a younger individual.  The court
  dismissed the evidence that "Timothy Fruits replaced Winnemore," stating
  that it was based on "speculation and hearsay."  Doc.109-Pgs.7-8.
  The court did not address the other replacement evidence adduced by
  the Commission (e.g., the branch manager position was initially filled
  by Cipully, on an interim basis, and then by Freeze).  The court
  also assessed whether the Commission had met its burden of "proving
  pretext."  Doc.109-Pgs.10-11.  The court ruled, without explanation,
  that "no reasonable fact finder could find Defendant discriminated
  against Winnemore on the basis of age."  Doc.109-Pg.11.
  The Commission appealed to this Court.  In its brief, the Commission
  pointed out the district court's factual error with respect to the
  date of Mogle's employment with Complete Dewatering.  The Commission
  cited the substantial body of evidence linking Mogle, at every stage
  of the decisional process, to Winnemore's termination.  The Commission
  also addressed the replacement issue.  The Commission argued that the
  evidence supporting Fruits' status as Winnemore's replacement was
  not hearsay.<5>  The Commission referenced the undisputed evidence
  that Cipully and Freeze, in succession, assumed Winnemore's duties as
  branch manager.  The Commission stressed that these individuals were
  properly treated as replacements, for purposes of the prima facie case,
  even though they were both within the protected class.  See EEOC Brief
  at 31-32  (citing, e.g., O'Connor v. Consolidated Coin Caterers Corp.,
  517 U.S. 308 (1996); Turlington v. Atlanta Gas Light Co., 135 F.3d 1428
  (11th Cir.), cert. denied, 525 U.S. 962 (1998)).  Finally, the Commission
  argued that its evidence was sufficient to raise a question of fact on
  the issue of pretext.  The Commission asserted that the company's job-
  and cost-cutting explanations for the termination were belied by the
  fact that the company hired a succession of younger individuals to work
  in the branch manager position, each of whom was paid on a salary basis.
  Complete Dewatering defended the district court judgment, although
  on different grounds than those adopted by the district court.
  Complete Dewatering did not endorse the district court's finding
  that Mogle was not employed by Complete Dewatering until August 1990.
  Complete Dewatering argued, nonetheless, that the age-discriminatory
  statements attributed to Mogle should be disregarded because Mogle
  had "no involvement" in the decision to terminate Winnemore.  Complete
  Dewatering Brief at 26.  Complete Dewatering did not disclose its prior
  admission, in its formal position statement provided to the Commission,
  that Mogle was one of the decision-makers with respect to Winnemore's
  termination.
  Complete Dewatering also offered a revisionist view of the replacement
  issue.  Confronted with the obvious fact that Cipully  and Freeze
  could be used to satisfy the replacement element of the prima facie
  case, notwithstanding their protected group status, Complete Dewatering
  invented new theories for defeating the replacement evidence.  Complete
  Dewatering urged that Cipully could not be viewed as Winnemore's
  replacement because Cipully "was only temporarily designated as the
  person in charge of the facility" and "the sales aspect of Winnemore's
  branch manager duties was assigned to [Frank] Hornbrook who was in his
  sixties at the time."  Complete Dewatering Brief at 37-38.  That position
  conflicted with Complete Dewatering's repeated admissions in the district
  court that Cipully assumed Winnemore's job duties and was, in fact,
  his initial replacement.  With respect to Freeze, Complete Dewatering
  contended  that Freeze was not Winnemore's replacement because Freeze
  "was hired by Mogle some ten months after Winnemore's termination by
  Share."  Id. at 38.  That position conflicted with Complete Dewatering's
  admission, in its formal position statement, that Freeze was Winnemore's
  replacement.  In advancing these new replacement theories, Complete
  Dewatering did not disclose its prior inconsistent admissions with
  respect to the replacement status of Cipully and Freeze.
  Although affirming the grant of summary judgment, a three-judge panel
  of this Court digressed from the district court's rationale in several
  respects.<6>  The panel did not perpetuate the district court's factual
  error with respect to the date of Mogle's employment with Complete
  Dewatering.  Instead, the panel simply assumed that Mogle played no
  role in the decision to terminate Winnemore's employment, based on
  the panel's finding that the date of termination was March 1990, as
  argued by Complete Dewatering, rather than May 1990.  Slip op. at 3-5 &
  6 n.1.  The panel did not address the substantial evidence adduced by
  the Commission establishing Mogle's role in the decision to terminate
  Winnemore's employment, even assuming a termination date of March
  1990.   The panel also ruled that the Commission could not satisfy
  the replacement element of the McDonnell Douglas prima facie case.
  The panel did not treat the replacement evidence concerning Timothy
  Fruits as hearsay.  The panel, instead, found that the explicit evidence
  that Mogle hired Fruits as Winnemore's replacement was "neutralized" by
  evidence that Fruits, during his short tenure with Complete Dewatering,
  did not perform the same duties as Winnemore.  Id. at 6.  With respect to
  Cipully, the panel accepted Complete Dewatering's newly-hatched argument
  that Cipully could not be viewed as Winnemore's replacement because the
  "sales aspects" of Winnemore's job were assigned to Frank Hornbrook,
  with Cipully merely assuming Winnemore's "managerial duties."<7>  Id. at
  7-8. Similarly, the panel accepted Complete Dewatering's argument that
  Freeze could not be viewed as Winnemore's replacement because Freeze "was
  hired ten months after Winnemore was terminated . . . by a different
  decision maker, Mogle, than the man who terminated Winnemore in March
  of 1990."  Id. at 9-10.  Finally, the panel ruled that "the EEOC has
  not shown that the district court erred in granting summary judgment
  in the alternative on the EEOC's failure to show pretext."  Id. at 11.
  The panel opined, without further elaboration, that "Complete Dewatering
  offered undisputed evidence that it was having financial troubles
  in March of 1990 and decided to shift Winnemore to a commission-only
  position in order to generate sales while saving money."  Id.
  The Commission filed a petition for panel rehearing.  The Commission
  advanced three arguments in its petition.  First, the Commission
  argued that the panel ignored a critical piece of evidence supporting
  the Commission's contention that Mogle played a role in Winnemore's
  termination.  The Commission referred to Share's admission, when he
  met with Winnemore in March 1990, that  "Mogle had made the decision
  that they could phase this out and go into an independent contractor
  deal."  Petition for Rehearing at 3-7.  Second, the Commission argued
  that the panel committed a fundamental error in its treatment of the
  replacement issue.  The Commission stressed that the panel overlooked the
  undisputed evidence in the district court that Cipully replaced Winnemore
  as branch manager.  Id, at 7-12.<8>  Finally, the Commission argued that
  the panel's ruling on the issue of pretext was "factually flawed and
  unresponsive to the Commission's evidence."  Id. at 12.  The Commission
  noted that the panel's one-sentence statement in support of its ruling
  on pretext -- that "Complete Dewatering offered undisputed evidence
  that it was having financial troubles in March of 1990 and decided to
  shift Winnemore to a commission-only position in order to generate sales
  while saving money" (slip op. at 11) -- ignored the critical point that
  Winnemore's position was not eliminated and that none of his successors
  in the branch manager position was paid on a commission-only basis.
  The Commission's petition for rehearing remained pending with the
  panel for nearly six months.  The panel denied the petition without
  explanation.
  4.  The District Court's Fee Decisions
  In its petition for attorney's fees, Complete Dewatering argued that
  it was entitled to its fees under the EAJA's "substantially justified"
  standard.  In rebuttal, the Commission advanced the legal argument that
  the EAJA's "substantially justified" standard does not apply to the
  Commission's ADEA actions.  Alternatively, the Commission argued that
  fees were not proper in this case even assuming that the "substantially
  justified" standard applied.
  Complete Dewatering's petition for attorney's fees was referred
  to Magistrate Judge Turnoff.  The parties briefed the fees issue
  extensively.  On February 13, 1998, Judge Turnoff held a hearing on
  the fees petition.  During the hearing, Complete Dewatering argued
  that the Commission' position was not substantially justified because
  Winnemore "was fired by Fred Share in March and not by Steve Mogle a
  month or two later as they would contend.  And that's critical, because
  the only evidence whatsoever to any discriminatory animus anywhere in
  the record of this case is one comment made by Mogle."  Doc.157-Pg.9.
  The Commission rejoined that it was "confusing" for Complete Dewatering
  to focus on the "date of termination and the [identity of the] decision
  maker" given the fact that "when the defendant itself provided a
  position statement to the EEOC [it] admit[ted] that Steve Mogle made
  that decision as well.  Steve Mogle made the March 30th decision to
  change [to the commission-only] pay plan, and Steve Mogle made the
  termination decision in May."  Doc.157-Pg.19.  The Commission also
  referred to the extensive evidence linking Mogle to the decisional
  process, as well as the evidence supporting the Commission's case under
  a circumstantial evidence theory.  On the latter point, the Commission
  stressed that it had substantial evidence of Winnemore's replacement
  by younger individuals.  The Commission urged that both Timothy Fruits
  and Robert Freeze could be considered Winnemore's replacements and
  added that "even if that were not true, defendant admits that Dominic
  [Cipully], who was there under Al Winnemore, took over Al Winnemore's
  job after he left.  And Dominic [Cipully] again is substantially younger
  than Al Winnemore."<9>  Doc.157-Pg.21.   Judge Turnoff issued a report,
  recommending that Complete Dewatering's petition for attorney's fees
  be denied.  Judge Turnoff first noted that the Commission made "a
  very persuasive argument" that the EAJA's "substantially justified"
  standard does not apply to the Commission's ADEA actions insomuch as
  "the ADEA contains its own fee shifting provision which only allows for
  a reasonable fee award to be paid to prevailing plaintiffs," meaning that
  "[f]ees can only be awarded to prevailing defendants . . . under the bad
  faith exception to the American Rule."  Doc.131-Pg.4.  Judge Turnoff
  determined, however, that it was unnecessary to reach this issue,
  concluding that Complete Dewatering was "not entitled to fees under the
  EAJA, even if the Statute applies, because the government's position
  was substantially justified."  Doc.131-Pg.5.
  In finding that the Commission's position was "substantially justified,"
  Judge Turnoff cited the direct evidence of discrimination advanced by the
  Commission.  Judge Turnoff noted that the "Defendants' primary argument
  in support of their position that the government pursued this case absent
  substantial justification is that Mr. Mogle was not the actual 'decision
  maker' who terminated Mr. Winnemore."  Doc.131-Pg.7.  Although finding
  some "evidence in the record" to support Complete Dewatering's argument
  "that Mr. Winnemore was terminated by an individual named Fred Share
  on March 30, 1990," Judge Turnoff determined that "the record, when
  evaluated as a whole, [was] not completely lucid."  Doc.131-Pg.7.
  Judge Turnoff cited Winnemore's testimony "that although he had been
  placed on commission and his salary had been terminated as of March
  30, 1990, he wasn't actually terminated from employment until May,
  1990, by Mr. Mogle."  Doc.131-Pgs.7-8.  Judge Turnoff also pointed
  to the Commission's evidence that "Mr. Mogle was intimately involved
  in the decision made by Mr. Share in March to change Mr. Winnemore's
  compensation package."  Doc.131-Pg.8.  Alternatively, Judge Turnoff
  found that the Commission was substantially justified in pursuing its
  claim "through circumstantial evidence of discriminatory intent."
  Doc.131-Pg.8.  In Judge Turnoff's view, the Commission "proffered
  colorable evidence that [Complete Dewatering] hired replacements for
  Mr. Winnemore's position and, thus, payroll expenses were not cut" as
  a result of Winnemore's termination.  Doc.131-Pg.8.
  Complete Dewatering filed objections to Judge Turnoff's report.  These
  objections were filed with the same district court judge, Judge King,
  who had entered the order granting summary judgment in favor of Complete
  Dewatering.  Judge King overturned Judge Turnoff's recommendation.
  Judge King agreed with Complete Dewatering that the EAJA's "substantially
  justified" standard "governs this case," rejecting the Commission's
  argument that the "substantially justified" standard does not apply to
  the Commission's ADEA actions.  Doc.135-Pg.13.  Judge King ruled that the
  Commission was not substantially justified in believing that Mogle played
  a role in the decision to terminate Winnemore because the Commission was
  "keenly aware that Winnemore had been terminated by Share on March 30,
  1990."  Doc.135-Pg.7.  Judge King noted Judge Turnoff's finding that
  the Commission "presented competent evidence that Mogle was 'intimately
  involved' in Share's decision to change Winnemore's compensation package
  [in March 1990]" but stated that "the only evidence presented by the
  EEOC was Winnemore's speculation that Mogle may have been involved in
  that decision."  Doc.135-Pg.6.  In reaching this conclusion, Judge King
  did not make reference to Winnemore's testimony that Share informed him,
  point blank, that "Mogle had made the decision that they could phase
  this out and go into an independent contractor deal."  Doc.71-Pg.61.
  With respect to the Commission's circumstantial evidence, Judge King
  reiterated his conclusion, from the merits stage, that the Commission's
  evidence of Winnemore's replacement by Timothy Fruits was based on
  "speculation and hearsay."  Doc.135-Pg.8.  Judge King made no reference
  to the evidence of Winnemore being replaced by Cipully, on an interim
  basis, and Freeze on a permanent basis.
  5.  Standard Of Review
  This case involves an award of attorney's fees under the EAJA.
  The central issue in this appeal -- whether the EAJA's "substantially
  justified" standard applies to ADEA actions brought by the Commission --
  is legal in nature, involving the proper interpretation of the EAJA and
  the ADEA.  This Court reviews such a legal issue de novo.  See Bishop
  v. Reno, 210 F.3d 1295, 1298 (11th Cir. 2000).  The district court's
  determination that the Commission did not satisfy the "substantially
  justified" standard in this case is reviewed under an abuse of discretion
  standard.  See United States v. Jones, 125 F.3d 1418, 1424-25 (11th
  Cir. 1997). A court abuses its discretion, in awarding attorney's fees
  to a prevailing defendant in a civil rights case, when "the record does
  not support the decision to grant fees."  EEOC v. Reichhold Chems.,
  Inc., 988 F.2d 1564, 1572 (11th Cir. 1993) (reversing the award of
  attorney's fees to a prevailing defendant).

 SUMMARY OF ARGUMENT

  The EAJA's "substantially justified" standard does not apply to the
  Commission's ADEA actions.  By its plain terms, the "substantially
  justified" standard does not apply where the underlying statute has its
  own fee-shifting provision.  The ADEA contains a specific fee-shifting
  provision that severely restricts the award of attorney's fees to
  prevailing defendants.  In enacting the EAJA, Congress made clear
  that it intended to except civil rights statutes from the reach of
  the EAJA's "substantially justified" standard, since those statutes
  contain special fee-shifting rules designed to encourage the vigorous
  enforcement of federal law.  Based on this evidence of congressional
  intent, courts have uniformly concluded that the EAJA's "substantially
  justified" standard does not apply to the Commission's actions under
  Title VII of the Civil Rights Act of 1964.  Subjecting the Commission's
  ADEA actions, but not its Title VII actions, to the reach of the EAJA's
  "substantially justified" standard would lead to anomalous results that
  could not have been intended by Congress.
  Even assuming that the "substantially justified" standard applies to the
  Commission's ADEA actions, an award of fees is not proper in this case.
  First, the Commission's position in this case was "substantially
  justified."  Despite its defeat on the merits,  the Commission had
  a reasonable basis in law and fact for maintaining its ADEA action.
  In addition, the EAJA contains a "special circumstances" exception to the
  award of attorney's fees.  That exception applies in this case, given
  the evidence of Complete Dewatering's bad faith.  Complete Dewatering
  misled the court by failing to acknowledge its prior admission that
  Mogle was involved in the decision to terminate Winnemore's employment
  and by failing to acknowledge its prior admissions that Cipully and
  Freeze were replacements for Winnemore.

 ARGUMENT

 THE DISTRICT COURT ERRED IN AWARDING ATTORNEY'S FEES TO COMPLETE
 DEWATERING UNDER THE EAJA'S "SUBSTANTIALLY JUSTIFIED" STANDARD.

  A.   The Commission's ADEA Actions Are Not Subject To The    EAJA's
  "Substantially Justified" Standard
  The threshold legal issue raised by this appeal concerns the
  applicability of the EAJA to ADEA actions brought by the Commission.
  The EAJA has two provisions that regulate the award of attorney's fees
  in judicial actions.  Subsection (b) of the EAJA, 28 U.S.C. 2412(b),
  provides that "[u]nless expressly prohibited by statute," the "United
  States shall be liable for [attorney's] fees and expenses to the same
  extent that any other party would be liable under the common law or under
  the terms of any statute which specifically provides for such an award."
  Subsection (d) of the EAJA, 28 U.S.C.  2412(d), provides that "[e]xcept
  as otherwise specifically provided by statute," a court "shall award
  to a prevailing party other than the United States [attorney's] fees
  and other expenses" incurred in any civil action "brought by or against
  the United States . . . unless the court finds that the position of the
  United States was substantially justified or that special circumstances
  make an award unjust."  Subsection (d) authorizes fees on behalf of a
  business "the net worth of which did not exceed $7,000,000 at the time
  the civil action was filed, and which had not more than 500 employees
  at the time the civil action was filed."  28 U.S.C.  2412(d)(2)(B)(ii).
  Businesses with a net worth in excess of $7,000,000 or with more than 500
  employees do not qualify for fees under the "substantially justified"
  standard.   There is no dispute that, by virtue of subsection (b) of
  the EAJA, the Commission is liable for attorney's fees under the same
  standard applicable to cases in which an ADEA defendant prevails  in
  private litigation.  See EEOC v. Hendrix College, 53 F.3d 209, 210-11
  (8th Cir. 1995).  As discussed below, that standard is the "bad faith"
  standard.  Id.  In this case, Complete Dewatering has not invoked the
  "bad faith" standard.  Instead, Complete Dewatering seeks its fees under
  the "substantially justified" standard of subsection (d) of the EAJA.
  The Commission concedes that Complete Dewatering meets the qualifying
  threshold for the award of fees under the "substantially justified"
  standard, i.e., has less than 500 employees and a net worth that does not
  exceed $7,000,000.  The question is whether the "substantially justified"
  standard, ab initio, applies to the Commission's ADEA actions.
       i.   The ADEA Contains A Specific Fee-Shifting Provision    That
       Severely Restricts The Award Of Attorney's Fees    To Prevailing
       Defendants
  The ADEA was passed in 1967, three years after Title VII of the
  Civil Rights Act of 1964, 42 U.S.C.  2000e et seq. ("Title VII").
  As in the case of Title VII, the ADEA contains an elaborate pre-suit
  procedure designed to facilitate the consensual resolution of an
  individual's complaint of discrimination.  An ADEA claimant must first
  file a charge of discrimination with the Commission.  See 29 U.S.C. 
  626(d).  The Commission may not bring suit on that charge until it
  first attempts "to eliminate the discriminatory practice or practices
  alleged, and to effect voluntary compliance with the requirements
  of [the Act] through informal methods of conciliation, conference,
  and persuasion."  29 U.S.C.  626(b).  Since 1978, the ADEA has been
  enforced by the Commission under the same basic procedures that apply
  to the Commission's enforcement  of Title VII.  See Rebecca Hanner
  White, The EEOC, The Courts, and Employment Discrimination Policy:
  Recognizing the Agency's Leading Role in Statutory Interpretation,
  1995 UTAH L. REV. 51, 66-68 (1995) (noting that the 1978 Reorganization
  Plan  "transferred ADEA enforcement authority to the EEOC, 'granting
  to a single agency broad authority and responsibility for Federal fair
  employment policy and enforcement'").
  Like most civil rights statutes, the ADEA contains its own fee-shifting
  provision.  That provision, borrowed from the Fair Labor Standards Act,
  states that a court "shall, in addition to any judgment awarded to the
  plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by
  the defendant."  29 U.S.C.  626(b) (incorporating 29 U.S.C.  216(b)).
  The ADEA's fee-shifting provision mandates an award of attorney's fees
  to a prevailing plaintiff;  it does not expressly provide for an award
  of attorney's fees to a prevailing defendant.  Nevertheless, courts have
  held that the ADEA permits an award of attorney's fees to a prevailing
  defendant under the "bad faith" exception to the "American Rule" on fees.
  See, e.g., Turlington v. Atlanta Gas Light Co., 135 F.3d 1428, 1437
  (11th Cir. 1998).  Thus, in  litigation under the ADEA, a prevailing
  defendant is entitled to its attorney's fees "upon a finding that the
  plaintiff litigated in bad faith."  Id.
  There are two important features of the ADEA's fee-shifting provision.
  First, the ADEA evinces a clear bias against the award of attorney's fees
  to prevailing defendants.  The ADEA expressly directs district courts
  to award attorney's fees to prevailing plaintiffs.  The ADEA could have
  provided the same direction with respect to the award of attorney's fees
  to prevailing defendants.  Instead, the ADEA draws a sharp distinction
  between prevailing plaintiffs and defendants, authorizing fee awards to
  prevailing defendants only under the "bad faith" standard.  The ADEA,
  in this regard, adopts an even more stringent standard for the award of
  attorney's fees to prevailing defendants than the standard of "frivolous,
  unreasonable, or without foundation," applicable to actions under Title
  VII.  See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 418-23 (1978)
  (contrasting the "bad faith" standard and the somewhat more lenient
  standard applicable under Title VII); Turlington, 135 F.3d at 1437 n.19
  (stressing that the ADEA's "bad faith" standard is a more difficult
  standard for defendants to meet than the Christiansburg standard).
  On the other hand, while the ADEA differs from Title VII in the
  degree to which it limits the award of attorney's fees to prevailing
  defendants, the ADEA's fee-shifting provision reflects the same
  enforcement objectives that underlie Title VII's fee-shifting provision.
  In Christiansburg Garment, the Supreme Court adopted a dual standard
  for the award of attorney's fees to prevailing parties in Title
  VII cases.  The Court ruled that a prevailing Title VII plaintiff
  "is to be awarded attorney's fees in all but special circumstances."
  434 U.S. at 417.  In contrast, a prevailing Title VII defendant is to
  be awarded attorney's fees only "upon a finding that the plaintiff's
  action was frivolous, unreasonable, or without foundation."  Id. at 421.
  The Court stressed that this dual standard was necessary "to promote the
  vigorous enforcement of the provisions of Title VII."<10>  Id. at 422.
  The ADEA codifies just such a dual standard.  See Monroe v. Children's
  Home Ass'n of Illinois, 128 F.3d 591, 594 (7th Cir. 1997) (noting
  that the ADEA adopts the same "asymmetric" approach to fee shifting as
  other civil rights laws; "[p]revailing plaintiffs recover their fees
  routinely, while defendants recover only [in limited circumstances]").
  The only difference is that the ADEA takes the matter one step further
  by relegating prevailing defendants to the highly restrictive "bad
  faith" standard.  As one court has put the matter, Congress "chose its
  words carefully" in the ADEA, authorizing the award of attorney's fees
  to prevailing plaintiffs while curtailing substantially "the recovery
  of attorney's fees by an employer who has successfully defended himself
  against an accusation of age discrimination."  Richardson v. Alaska
  Airlines, Inc., 750 F.2d 763, 767 (9th Cir. 1984).


   ii. By Its Plain Terms, The EAJA's "Substantially    Justified" Standard
   Does Not Apply To Statutes, Such    As The ADEA, That Have Specific
   Fee-Shifting    Provisions
  Since the ADEA contains its own fee-shifting provision, the
  Commission's ADEA actions are subject to the EAJA's "substantially
  justified" standard only if that standard overrides the ADEA's specific
  fee-shifting provision.  There is no evidence that Congress intended
  such a statutory override.  To the contrary, by its plain terms, the
  EAJA's "substantially justified" standard does not apply to statutes,
  such as the ADEA, that have specific fee-shifting provisions.
  Subsection (d) of the EAJA, 28 U.S.C.  2412(d), provides for the
  award of attorney's fees in certain cases in which the position of
  the United States is not "substantially justified."  Subsection (d),
  however, contains a critical caveat.  The subsection applies "[e]xcept
  as otherwise specifically provided by statute."  This language makes
  clear that not all statutes are subject to the "substantially justified"
  standard.  In particular, the "substantially justified" standard does
  not apply to those statutes that "otherwise specifically provide[]"
  for fee-shifting, i.e., those with their own fee-shifting provisions.
  It is instructive to contrast the language of subsection (d)  with the
  parallel language of subsection (b).  Subsection (b) waives the immunity
  of the United States.  The subsection makes the United States liable
  for attorney's fees "to the same extent that any other party would be
  liable."  28 U.S.C.  2412(b).  Subsection (b) has its own caveat but one
  that differs from the subsection (d) caveat.  Specifically, subsection
  (b) applies "[u]nless expressly prohibited by statute."  Id.  Subsection
  (b) broadly subjects the United States to an award of attorney's fees
  -- under the same standard applicable to a similarly-situated private
  litigant -- except in the rare case in which a statute specifically
  states that fees are not to be awarded against the United States.
  Subsection (d) does not have the expansive reach of subsection (b).
  Subsection (d) excepts from its reach any statute that contains its
  own fee-shifting provision.  Subsection (d) applies when there is no
  other fee-shifting statute in play.  It does not supersede existing
  fee-shifting statutes.
  This view of the scope of subsection (d) is further supported by the
  EAJA's "savings" provision.  That provision, originally enacted as
  Section 206 of Public Law 96-481, provides as follows:
  Nothing in section 2412(d) of title 28, United States Code, as
 added by section 204(a) of this title, alters, modifies, repeals,
 invalidates, or supersedes any other provision of Federal law which
 authorizes an award of such fees and other expenses to any party other
 than the United States that prevails in any civil action brought by or
 against the United States.

 Pub. L. No. 96-481,  206, 94 Stat. 2325, 2330 (1980) (lapsed), as

 reenacted by Pub. L. No. 99-80,  3, 99 Stat. 184, 186 (1985).
 Together with the language of subsection (d) itself, this provision
 makes clear that subsection (d) prohibits the "substantially justified"
 standard "from either narrowing or broadening the award of fees allowed
 by other provisions of federal law."  Huey v. Sullivan, 971 F.2d 1362,
 1367 (8th Cir. 1992).
  Finally, well-established canons of statutory construction confirm
  that the general standard of subsection (d) does not trump the specific
  fee-shifting provisions of other federal statutes.  "Where one statute
  deals with a subject in general terms, and another deals with a part of
  the same subject in a more [specific] way, the two should be harmonized
  if possible."  2B N. SINGER, SUTHERLAND'S STATUTORY CONSTRUCTION 
  51.05 at 174 (5th ed. 1992). Where, however, there is a conflict, the
  more specific statute will prevail, "regardless of whether it was passed
  prior to the general statute, unless it appears that the legislature
  intended to make the general act controlling."  Id. (noting that a
  general statute does not supersede a prior specific statute unless the
  more specific statute "'is repealed in general words or by necessary
  implication'").  In this case, the EAJA is a general fee-shifting
  statute.  That statute must give way to specific fee-shifting statutes
  pre-dating its enactment unless it appears that Congress "intended to
  make the [EAJA] controlling" vis a vis those statutes.  Id.  No such
  intent is apparent on the face of the EAJA.  To the contrary, the EAJA
  makes manifestly clear that more specific fee-shifting statutes are
  not to be affected by the EAJA's "substantially justified" standard.
  The ADEA is precisely the type of statute that lies outside the reach
  of the EAJA's "substantially justified" standard.  The ADEA has its
  own fee-shifting provision.  That provision reflects an intent to
  encourage the vigorous enforcement of the ADEA by mandating an award of
  attorney's fees to prevailing plaintiffs, while severely restricting
  the award of attorney's fees to prevailing defendants.  Applying the
  EAJA's "substantially justified" standard to the ADEA would thwart
  the pro-enforcement objectives of the ADEA's fee-shifting provision.
  Plainly, the ADEA "otherwise specifically provide[s]" for fee-shifting
  and, thus, is not affected by the EAJA's "substantially justified"
  provision.
   iii. The EAJA's Legislative History Confirms That     Congress
   Intended To Except Statutes With Specific     Fee-Shifting Provisions,
   Particularly Civil Rights     Statutes Such As The ADEA, From The Reach
   Of The     EAJA's "Substantially Justified" Standard  Although the text
   of the EAJA is clear enough in placing the ADEA beyond the reach of
   the EAJA's "substantially justified" standard, the EAJA's legislative
   history removes any doubt on the point.  The EAJA was enacted into law
   in 1980.  The EAJA's enactment followed several years of legislative
   debate on the issue.  Much of this debate focused on the proper reach
   of the EAJA and its relationship to other fee-shifting statutes.
  The EAJA's legislative record is replete with statements to the effect
  that civil rights statutes, such as the ADEA, were not to be affected
  by the EAJA's "substantially justified" standard.  From the earliest
  stages of the legislative process, concerns were expressed that the EAJA
  might have the effect of deterring the vigorous enforcement of civil
  rights statutes.  In a hearing held on one of the EAJA's legislative
  antecedents, witnesses focused on language that would have made the
  United States liable for attorney's fees in actions brought under
  the Age Discrimination Act of 1975, which authorizes government suits
  against recipients of federal funds who discriminate on the basis of age.
  See Awarding of Attorneys' Fees in Federal Courts: Hearings Before the
  Subcommittee on Courts, Civil Liberties, and the Administration of House
  Committee on the Judiciary, 95th Cong. 126 (1977-78).  These witnesses
  expressed the concern that subjecting the United States to attorney's
  fees in these cases would "almost certainly hinder effective enforcement
  of the anti-age discrimination provisions of the Age Discrimination
  Act of 1975" by "deter[ring] federal agencies from becoming involved in
  litigation aimed at enforcing [that Act]."  Id. at 125.  In subsequent
  hearings, the focus shifted to the "substantially justified" standard
  itself.  Representatives of public interest groups complained that
  broad application of that standard could have a "chilling effect" on
  "vigorous" prosecution of "civil rights violations."  Award of Attorneys'
  Fees Against the Federal Government: Hearings Before the Subcommittee
  on Courts, Civil Liberties, and the Administration of Justice of the
  House Committee on the Judiciary, 96th Cong. 92 (1980).
  Repeatedly, the EAJA's sponsors assured objectors that the "substantially
  justified" standard would not supersede the well-established
  fee-shifting rules for civil rights cases.  In hearings held before
  the Senate Judiciary Committee, a witness opined that  the proposed
  legislation could have an impact on "civil rights matters."  Equal
  Access to Justice Act of 1979, S. 265: Hearings Before the Subcomm. on
  Improvements in Judicial Machinery of the Senate Committee on the
  Judiciary, 96th Cong. 56 (1979).  Senator DeConcini, the EAJA's chief
  sponsor, commented that fee-shifting was already "provided in the law"
  for those cases.  Id.  The witness concurred in Senator DeConcini's
  understanding that "employment discrimination" cases would be excepted
  from the "substantially justified" standard.  Id.  In a similar vein,
  Senator Kennedy expressed concerns "in committee" about "the bill's
  potential impact on vigorous regulation."  125 Cong. Rec. 21444 (July
  31, 1979).  These concerns were assuaged by "the distinguished Senator
  from Arizona [DeConcini]," who agreed to the "understandings reflected in
  the committee report," understandings that, in Senator Kennedy's view,
  "adequately preserve[d] the integrity of the enforcement process."  Id.
  One of these "understandings" was that "statutes, such as the Freedom of
  Information Act and civil rights laws, which contain special fee-shifting
  provisions remain unaffected by this measure, even if the standard for
  awarding fees under the statute has evolved through case law and is
  not set out in the statute itself."  Id. at 21445.
  Senator DeConcini confirmed Senator Kennedy's understanding of the EAJA's
  scope in subsequent testimony before a House committee.  According to
  Senator DeConcini:
 In the federal courts, the bill[] appl[ies] to most civil actions.
 Again, however, there are exceptions.  Tort actions are excluded because
 the economic deterrents to litigate are not as great an obstacle in
 these cases.  Moreover, the bill will not replace or supersede any
 existing fee-shifting statute such as the Freedom of Information Act,
 the Civil Rights Act, and the Voting Rights Act, or alter the case law
 governing those Acts.

 Award of Attorneys' Fees Against the Federal Government: Hearings Before
 the Subcommittee on Courts, Civil Liberties, and the Administration of
 Justice of the House Committee on the Judiciary, at 24.
    The relevant committee reports reflect this view of the EAJA's scope.
    The House Committee Report clarifies that subsection (d)  does not
    apply to civil actions "already covered by existing fee-shifting
    statutes."  H.R. Rep. No. 96-1418, 96th Cong., 2d Sess. 18 (1980),
    reprinted in 1980 U.S.C.C.A.N. 4984, 4997.  In a critical passage,
    the Report states that subsection (d) "is not intended to replace or
    supersede any existing fee-shifting statutes such as the Freedom of
    Information Act, the Civil Rights Acts, and the Voting Rights Act in
    which Congress has indicated a specific intent to encourage vigorous
    enforcement, or to alter the standards or the case law governing
    those Acts."  Id. (emphasis added).  The Senate Committee Report
    contains identical language.  See S. Rep. No. 96-253, 96th Cong.,
    1st Sess. 20 (1979); see also H.R. Rep. No. 96-1005, 96th Cong., 2d
    Sess. 18 (1980) (noting that subsection (d) "applies to all civil
    actions except tort actions and those already covered by existing
    fee-shifting statutes").
  Of course, Congress passes statutes, not legislative histories, and one
  must be wary of allowing legislative history to substitute for text.
  See Blanchard v. Bergeron, 489 U.S. 87, 97-100 (1989) (Scalia, J.,
  concurring) (discussing the ways in which committee reports and floor
  statements can be manipulated by those unable to obtain consensus
  for their position).  In this case, however, the statements in the
  legislative record are not divorced from the relevant text.  They relate
  directly to the meaning of the caveat in subsection (d) and the "savings"
  clause of Section 206, thus elucidating, rather than trumping, the text.
  It could not be more clear that Congress intended to place civil rights
  statutes such as the ADEA, with fee-shifting provisions designed to
  promote the vigorous enforcement of the statute, outside the reach of
  the EAJA's substantially justified standard.
   iv.  Subjecting The Commission's ADEA Actions To The
   "Substantially Justified" Standard Would Lead to    Anomalous Results
   That Could Not Have Been Intended    By Congress
  The text and history aside, there is an additional reason for
  construing the "substantially justified" standard as not applying to
  the Commission's ADEA actions.  The Commission enforces a number of
  anti-discrimination statutes, including both the ADEA and Title VII.
  Several courts have addressed the legal issue raised by this appeal
  in the Title VII context.  These courts have uniformly held that
  the EAJA's "substantially justified" standard does not apply to the
  Commission's Title VII actions.  See EEOC v. Consolidated Serv. Sys.,
  30 F.3d 58, 59 (7th Cir. 1994); EEOC v. Kimbrough Inv. Co., 703 F.2d
  98, 103 (5th Cir. 1983); EEOC v. Northwest Structural Components,
  Inc., 897 F. Supp. 249, 250-51 (M.D.N.C. 1995); cf.  Huey, 971 F.2d
  at 1366-67 (refusing to apply subsection (d) of the EAJA to the claim
  of a prevailing Title VII plaintiff in an action against a government
  agency).
  This established precedent provides strong support for the view that
  Congress intended the Commission to litigate its ADEA cases unencumbered
  by the EAJA's "substantially justified" standard.  The ADEA was enacted
  in 1967 "as part of an ongoing congressional effort to eradicate
  discrimination in the workplace" and is "but part of a wider statutory
  scheme to protect employees in the workplace nationwide," a scheme
  that includes both the ADEA and Title VII.  McKennon v. Nashville
  Banner Publ'g Co., 513 U.S. 352, 357 (1995).  "The ADEA and Title
  VII share common substantive features and also a common purpose:
  'the elimination of discrimination in the workplace.'"  Id. at 358.
  The Commission's "enforcement responsibilities under the ADEA [are]
  virtually identical to its responsibilities under Title VII."  Rebecca
  Hanner White, supra, p.68.  In deciding whether to litigate an ADEA
  case, the Commission is guided by the same considerations that guide
  its litigation decisions under Title VII.  If Congress intended to
  except the Commission's Title VII actions from the reach of the EAJA's
  "substantially justified" standard, it surely intended to except the
  Commission's ADEA actions from the reach of that standard.
  In the district court, Complete Dewatering argued that the EAJA's
  "substantially justified" standard can be tailored to fit within
  the ADEA's fee-shifting framework, even if it does not apply to
  the Commission's Title VII actions, because Title VII's fee-shifting
  provision expressly allows for fees to any "prevailing party" (plaintiff
  or defendant) while the ADEA's "is silent as to the provision of
  attorney's fees to prevailing defendants."  Doc.135-Pgs.10-11.  It is
  true that, in contrast to Title VII, the ADEA expressly authorizes
  the award of attorney's fees to prevailing plaintiffs only.  This does
  not change the fact, however, that the ADEA has its own fee-shifting
  provision.  That provision reflects the same dual standard that the
  Supreme Court read into Title VII in Christiansburg Garment, albeit with
  even less protection for the prevailing defendant than that afforded
  under the Christiansburg standard (the ADEA defendant being limited
  to the "bad faith" standard).  See Monroe, 128 F.3d at 594 (linking
  the policies of the ADEA's dual standard on fee-shifting with those of
  the Christiansburg standard); Hoover v. Armco, Inc., 915 F.2d 355, 358
  (8th Cir. 1990) (McMillan, J., concurring in part, dissenting in part)
  (noting that the ADEA's "bad faith" standard serves the same purpose as
  the Christiansburg standard; it ensures that putative plaintiffs are not
  "chilled" from bringing suit); Freeman v. Package Mach. Co., 865 F.2d
  1331, 1347 (1st Cir. 1988) (stating that "[i]nsofar as cost-shifting
  is concerned," the ADEA is a "sister[] under the skin" with other
  civil rights statutes; Congress viewed the ADEA as a "'civil rights'
  type" of statute "similar to earlier, more traditional [civil rights]
  enactments"). There is no reason to think that, in enacting the EAJA's
  "substantially justified" standard, Congress intended to treat the
  ADEA and Title VII differently merely because the ADEA's fee-shifting
  provision does not expressly reference an award of fees to prevailing
  defendants.
  Indeed, if anything, the distinction cited by Complete Dewatering
  supports a contrary argument, i.e., application of the "substantially
  justified" standard is even less appropriate under the ADEA's
  fee-shifting provision.  The ADEA was passed three years after Title VII.
  In crafting the ADEA's fee-shifting provision, Congress could have
  employed the "prevailing party" terminology used in Title VII.  Congress
  chose not to do so.  Instead, Congress chose, quite deliberately, to
  limit the award of attorney's fees to prevailing plaintiffs, reflecting
  "an intention to impose the additional burden of paying attorney's fees
  only on employers who violate the statute," Richardson, 750 F.2d at
  767, except in cases where the ADEA action is maintained in bad faith.
  The EAJA must be read against the backdrop of the "carefully" chosen
  words in the ADEA's fee-shifting provision, distinguishing between
  prevailing plaintiffs and defendants.  Id.  Given the pro-plaintiff
  bias apparent on the face of the ADEA's fee-shifting provision, it
  would be a perverse result to subject the Commission's ADEA actions,
  but not its Title VII actions, to the reach of the EAJA's "substantially
  justified" standard.
  The principal objective of statutory interpretation is to produce a
  statutory scheme that is "'coherent and consistent.'"  Robinson v. Shell
  Oil Co., 519 U.S. 337, 340 (1997).  If at all possible, statutes on the
  same subject matter "are construed to be in harmony."  2B N. SINGER,
  SUTHERLAND'S STATUTORY CONSTRUCTION 
 51.02, at 122.  The ADEA and Title VII share "a common purpose"
 (McKennon, 513 U.S. at 358) and have similar fee-shifting provisions,
 designed to ensure the vigorous enforcement of the statute.  The EAJA
 should be interpreted in a manner that preserves (and harmonizes) the
 pro-enforcement objectives of the fee-shifting provisions under both
 the ADEA and Title VII.
   v.  The Circuit Court Authority Applying The EAJA's    "Substantially
   Justified" Standard To The     Commission's ADEA Actions Is
   Unpersuasive
  Despite the above arguments, two circuit courts have held that the
  EAJA's "substantially justified" standard applies to the Commission's
  ADEA actions.  See EEOC v. O & G Spring and Wire Forms Specialty Co.,
  38 F.3d 872 (7th Cir. 1994); EEOC v. Clay Printing Co., 13 F.3d 813
  (4th Cir. 1994).  These decisions are not persuasive and should
  not be followed by this Court.  Neither decision offers a coherent
  interpretation of the phrase "[e]xcept as otherwise specifically provided
  by statute," as used in subsection (d).  Neither decision addresses the
  meaning of the EAJA's "savings" provision.  Neither decision offers
  a persuasive rationale for permitting the "substantially justified"
  standard to override the ADEA's fee-shifting provision.
  In the O & G Spring case, the court stressed that the Commission
  had conceded (as it does here) that "EAJA sec. 2412(b) (the bad faith
  standard) applies to the ADEA," while maintaining that "the ADEA preempts
  application of sec. 2412(d) (the substantial justification standard)."
  38 F.3d at 883.  The court found this distinction "untenable" because
  "[t]he ADEA either preempts application of EAJA sec. 2412 or it does
  not."  Id.  The court's analysis ignores the critical distinction
  in the language of the two subsections.  Subsection (b) applies
  "[u]nless expressly prohibited by statute," language that qualifies the
  application of the subsection only to the extent that another federal
  statute expressly prohibits an award of fees against the United States.
  Subsection (d), in contrast, applies "[e]xcept as otherwise specifically
  provided by statute," language that excepts any statute with its own
  fee-shifting standard.  A primary objective of the EAJA is to hold the
  United States "to the same standards in litigating as private parties."
  S. Rep. No. 96-253, 96th Cong., 1st Sess. at 4.  Applying subsection
  (b) of the EAJA, thereby subjecting the Commission's ADEA actions to
  the same "bad faith" standard that applies in private litigation under
  the ADEA, achieves that objective.  Applying subsection (d) of the EAJA,
  in opposition to the ADEA's own fee-shifting standard, does not.
  B.   The Commission Satisfied The "Substantially Justified"   Standard
  In This Case
  For the foregoing reasons, the EAJA's "substantially justified" standard
  does not apply to the Commission's ADEA actions.  Accordingly, that
  standard does not provide a basis for awarding attorney's fees in
  this case.  Even assuming, however, that the "substantially justified"
  standard may be applied to the Commission's ADEA actions, the Commission
  satisfied that standard on the facts of this case.
  Under the EAJA, the "government bears the burden of showing that its
  position was substantially justified."  City of Brunswick, Ga. v. United
  States, 849 F.2d 501, 504 (11th Cir. 1988).  To be "substantially
  justified," the government's position must be "'justified in substance
  or in the main' -- that is, justified to a degree that could satisfy
  a reasonable person."  Pierce v. Underwood, 487 U.S. 552, 565 (1988).
  Substantially justified "does not mean a large or considerable amount of
  evidence, but rather 'such relevant evidence as a reasonable mind might
  accept as adequate to support a conclusion.'" Id.  A "position can be
  justified even though it is not correct, and . . . can be substantially
  (i.e., for the most part) justified if a reasonable person could think
  it correct, that is, if it has a reasonable basis in law and fact."
  Id. at 566 n.2.
  Although the government bears the burden of proving that its case is
  "substantially justified," the "fact that the government lost its case
  does not raise a presumption that the government's position was not
  substantially justified."  White v. United States, 740 F.2d 836, 839
  (11th Cir. 1984).  "It would be a war with life's realities to reason
  that the position of every loser in a lawsuit upon final conclusion was
  unjustified."  Evans v. Sullivan, 928 F.2d 109, 110 (4th Cir. 1991).
  Even a finding that the government's  underlying action was "arbitrary
  and capricious" does "not necessarily mean that the government acted
  without substantial justification."  Griffon v. United States Dep't
  of Health and Human Servs., 832 F.2d 51, 52 (5th Cir. 1987).  At the
  EAJA stage, "the court is not wedded to the underlying judgment on the
  merits in assessing either the Government's litigation position or its
  underlying conduct."  Federal Election Comm'n v. Rose, 806 F.2d 1081,
  1087 (D.C. Cir. 1986).  To the contrary, "Congress' inclusion of the
  discrete legal standard makes clear that an independent evaluation
  through an EAJA perspective is required."  Id.  "Only through a
  fresh look occasioned by application of the 'substantially justified'
  standard can the court honor Congress' intent, manifest in the inclusion
  of this standard, not to permit a prevailing party automatically to
  recover fees."  Id.; accord Broussard v. Bowen, 828 F.2d 310, 312 (5th
  Cir. 1987); Thigpen v. Chater, 1996 WL 197477, *1 (N.D. Ill. 1996); see
  also Christiansburg Garment Co., 434 U.S. at 421-22 (urging courts to
  "resist the understandable temptation to engage in post hoc reasoning
  by concluding that, because a plaintiff did not ultimately prevail,
  his action must have been unreasonable").
  In this case, the Commission proceeded under alternative theories of
  direct and circumstantial evidence.  The Commission's direct evidence
  case was based on statements made by Steve Mogle.  Among other things,
  the Commission had evidence that Mogle was asked by another company
  official why Winnemore, a "good man," had been terminated.  Doc.77-Pg.17.
  Mogle responded that he had "let [Winnemore] go" because Winnemore was
  "over the hill."  Doc.77-Pgs.16-18.  The term "over the hill" has an
  obvious connection to protected group status under the ADEA.  See NEW
  DICTIONARY OF AMERICAN SLANG 311 (1986) (defining "over the hill" as
  meaning "[m]iddle-aged or past middle age: I turned forty yesterday,
  so I guess I'm over the hill").
  The district court ruled that the Commission's position in this case was
  not "substantially justified," despite this proof, because the Commission
  was "keenly aware" that Winnemore had been terminated by Fred Share,
  not Mogle, "on March 30, 1990."  Doc.135-Pg.7.  The Commission was
  aware of nothing of the sort.  First, there is a good faith dispute in
  this case whether Winnemore was terminated in March 1990, when Complete
  Dewatering began paying him on a commission-only basis,<11> or May 1990,
  when Mogle formally rejected Winnemore's counterproposal, instructed
  him to "clean out [his] desk" because "[w]e just don't need you any
  longer," and informed him that the company had "just replaced [him]"
  with "a man in your office down there now that Frank Hornbrook took
  down to introduce him to Dominic [Cipully]."  Doc.71-Pg.49.  See Thomas
  v. Dillard Dep't Stores, Inc., 116 F.3d 1432, 1434 & n.4 (11th Cir. 1997)
  (ruling that a termination occurs when an employer "manifest[s] a clear
  intention to dispense with an employee's services").  Even assuming,
  moreover, that the termination took place in March 1990, there is
  compelling evidence that Mogle played a role in the events of that month.
  Mogle was hired in February 1990.  Doc.72-Pgs.14,36-37; Doc.73-Pgs.16,24.
  Mogle played an active role in employment decision-making during the
  months of February and March, making recommendations that resulted in
  the termination of some 40 employees.  Doc.73-Pg.16.  When Share met
  with Winnemore in March 1990,  Mogle was with Share.  Doc.73-Pg.27.
  Share specifically told Winnemore, during their meeting, that Mogle
  was the man behind the commission-only payment idea.  Doc.71-Pg.61.
  Given this evidence, directly linking Mogle to the events of March 1990,
  the Commission had a reasonable basis in fact for proceeding under a
  direct evidence theory.
  The Commission also had a reasonable basis for proceeding  under a
  circumstantial evidence theory.  Complete Dewatering claimed that it let
  Winnemore go because it needed to eliminate his position in order to
  "cut fixed costs in the form of payroll expenditures."  Doc.66-Pg.13.
  Yet, the undisputed evidence shows that Winnemore's branch manager
  position was not eliminated.  Initially, the company placed Timothy
  Fruits in the branch manager position.  When Fruits left the scene,
  the company assigned Dominic Cipully to the position.  Finally, the
  company hired Robert Freeze to fill the branch manager position on
  a permanent basis.  See supra pp. 9-10 (describing the replacement
  history for Winnemore's position).  Each of these individuals was
  substantially younger than Winnemore.  Although Complete Dewatering
  claimed that it needed to put somebody in the branch manager position
  who was willing to be paid on a commission-only basis, Doc.66-Pg.19,
  none of these individuals was paid on a commission-only basis.  See supra
  p. 10.  Robert Freeze, in fact, was compensated at a level twice that
  of Winnemore.  Id.  Taken together, this evidence supports a textbook
  case of discrimination under a McDonnell Douglas or circumstantial
  evidence theory.  See McDonnell Douglas Corp. v. Green, 411 U.S. 792
  (1973).
  At the merits stage, this Court ruled that the Commission's evidence was
  insufficient to either make out a prima facie case of discrimination
  or raise a question of fact on the issue of pretext.  The Commission,
  however, had reasonable grounds for believing otherwise.  This Court
  held, for example, that Fruits could not be viewed as Winnemore's
  replacement because, in this Court's view, the "duties of the two
  men were completely different."<12>  Slip op. at 6.  In fact, there
  is evidence that Fruits assumed many of  Winnemore's duties as branch
  manager.  Doc.76-Pgs.15-17,61.  Further, whatever Fruits may have done
  in the few weeks that he worked at the job, there is evidence, straight
  from the mouths of Complete Dewatering's officials, that Fruits was
  hired as Winnemore's replacement.  See supra p. 9.  The Commission was
  justified in believing that this evidence would suffice to satisfy the
  replacement element of its prima facie case.
  This Court also held that Cipully could not be viewed as Winnemore's
  replacement because the "management aspects [of Winnemore's job]
  became part of Cipully's job and the sales aspects became part of
  [Frank] Hornbrook's duties."  Slip op. at 8.  There is evidence that
  Cipully assumed both the sales and management aspects of Winnemore's
  job, with Hornbrook being assigned additional sales duties.  See supra
  n.8.  The Commission was justified in relying upon that evidence.
  The Commission was also justified in relying upon prior Eleventh Circuit
  case law, holding that the replacement element of the prima facie case
  is satisfied when an existing employee assumes some of the displaced
  employee's duties.  See Rollins v. TechSouth, Inc., 833 F.2d 1525, 1529
  (11th Cir. 1987); see also Tinker v. Sears, Roebuck & Co., 127 F.3d 519,
  522 (6th Cir. 1997) (evidence that an existing employee was shifted
  into a vacant position satisfies the "replacement" element where the
  employee was required "to perform duties for which he had not been
  responsible in his prior position").
  In a similar vein, this Court held that Freeze could not be viewed as
  Winnemore's replacement because, even though "he was hired as a salaried
  employee and performed both the managerial and sales responsibilities
  of the branch manager job," he "was hired ten months after Winnemore
  was terminated" by "a different decision maker, Mogle, than the
  man who terminated Winnemore in March of 1990."  Slip op. at 9-10.
  There is evidence that Mogle was in fact the individual behind the
  decision to terminate Winnemore's employment.  There is also Eleventh
  Circuit authority holding that  a gap of some eight months, between
  termination and replacement, does not deprive the replacement evidence
  of its probative value.  See Benson v. Tocco, Inc., 113 F.3d 1203,
  1211-12 (11th Cir. 1997).  Other courts have recognized, moreover, that
  employment decision-making often takes the form of a "'chain-reaction'
  replacement," where an employee is "phased out in favor of one or more
  much younger men," precisely what occurred in this case.  E.g., Garrett
  v. Firestone Tire & Rubber Co., 50 FEP Cases 233, 235, vacated in part
  on other grounds, 50 FEP Cases 238 (D.N.J. 1989).  Again, the Commission
  was justified in believing that it could rely upon this authority in
  pressing its circumstantial evidence theory.
  No doubt, the Commission did not fare well at the merits stage of
  the case.  At the EAJA stage, however, this Court is not wed "to
  the underlying judgment on the merits."  Rose, 806 F.2d at 1087.
  This Court is required to take a "fresh look" at the evidence "through
  an EAJA perspective."  Id.  The Commission respectfully submits that
  the evidence on which it relied in this case clears the substantially
  justified hurdle.
    C.   The EAJA's "Special Circumstances" Exception Applies In    This
    Case
  Finally, even assuming that the "substantially justified" standard
  applies in this case and would otherwise support an award of attorney's
  fees to Complete Dewatering, fees should be denied under the EAJA's
  "special circumstances" exception.  Subsection (d) of the EAJA provides
  for the award of attorney's fees in appropriate cases "unless the
  court finds that the position of the United States was substantially
  justified or that special circumstances make an award unjust."  28
  U.S.C.  2412(d)(1)(A) (emphasis added).  The "special circumstances"
  exception authorizes courts to deny fees where "equitable considerations
  dictate an award should not be made."  H.R. Rep. No. 96-1418, 96th
  Cong., 2d Sess., 11, reprinted in 1980 U.S.C.C.A.N. at 4990.  One such
  "equitable consideration" is whether the party seeking a fee award has
  clean hands.  See Air Transport Ass'n of Canada v. FAA, 156 F.3d 1329,
  1333 (D.C. Cir. 1998) (stressing that "the theme of 'unclean hands'
  pervades the jurisprudence of 'special circumstances' under EAJA").
  Complete Dewatering does not have clean hands in this case.   In its
  initial position statement, Complete Dewatering expressly  identified
  both Share and Mogle as the relevant decision-makers.  Complete
  Dewatering stated that "[a] decision was made by Mr. Fred Share . . . ,
  a shareholder of the company, and Mr. Steve Mogle
 . . . , the then president of the company, to attempt to salvage the
 branch. . . . Mr. Share and Mr. Mogle visited Mr. Winnemore and advised
 him basically that in order to save the branch, he would have to go
 on a commission basis."  Doc.117-Exh.4.  Taking Complete Dewatering at
 its word, the Commission engaged in extensive discovery in the district
 court, focused on Mogle's role in the decisional process.  The Commission
 uncovered age-discriminatory comments attributable to Mogle, supporting
 the Commission's claim under a direct evidence theory.
  Confronted with these damning proofs, Complete Dewatering did an about
  face.  Suddenly, it was Complete Dewatering's position that Mogle had
  nothing to do with the decision to terminate Winnemore's employment.
  This, in fact, became the linchpin of Complete Dewatering's defense and
  the driving force behind its motion for summary judgment.  In pressing
  this argument, Complete Dewatering never disclosed to the district
  court its prior admission that Mogle was one of the decision-makers
  with respect to  Winnemore's termination.
  On appeal, Complete Dewatering perpetuated (and added to)
  its dissembling.  First, Complete Dewatering reiterated its
  self-contradictory claim that Mogle had nothing to do with Winnemore's
  termination.  In addition, it added a new argument to its arsenal.
  Specifically, it maintained that Cipully could not be viewed as
  Winnemore's replacement because "the sales aspect of Winnemore's
  branch manager duties was assigned to Hornbrook who was in his sixties
  at the time."<13>  Complete Dewatering Brief at 38.  This argument
  flatly contradicted Complete Dewatering's repeated admissions in the
  district court that Cipully "was the one who replaced Al Winnemore."
  Doc.73-Pgs.43-44; see supra pp. 12-13 (discussing the evidence on
  this point).  Similarly, Complete Dewatering argued that Freeze could
  not be viewed as Winnemore's replacement even though the company
  had identified Freeze as Winnemore's "replacement," in its position
  statement (Doc.117-Exh.4), and acknowledged in its district court
  filings that Freeze was hired as "branch manager at the Davie facility."
  Doc.65-Pg.11.  At no point did Complete Dewatering disclose to this
  Court its prior on-the-record admissions with respect to Cipully's and
  Freeze's replacement status.
  The EAJA "explicitly directs a court to apply traditional equitable
  principles in ruling upon an application for counsel fees."  Oguachuba
  v. INS, 706 F.2d 93, 98 (2d Cir. 1983).  Under traditional equitable
  principles, the clean hands defense bars a claim for relief where
  the claimant "is seeking to secure a benefit 'from the very conduct'
  which is inequitable."  D. DOBBS, LAW OF REMEDIES  2.4(2), at 95 (2d
  ed. 1993).  In this case, Complete Dewatering is seeking attorney's
  fees in its capacity as a prevailing party.  Yet, Complete Dewatering
  acquired its prevailing party status, in large part, through a deceit,
  contradicting its own on-the-record admissions with respect to factual
  issues critical to the outcome of the case.  This is the paradigmatic
  case in which a party seeking an equitable remedy has dirtied its hands
  "'in acquiring the right he now asserts.'" Id.  Principles of equity
  demand that Complete Dewatering be denied its attorney's fees.CONCLUSION
  The EAJA's "substantially justified" standard does not apply to the
  Commission's ADEA actions.  Even assuming that the standard applies,
  a fee award is not justified in this case.  The district court's award
  of attorney's fees to Complete Dewatering should be reversed.

     Respectfully Submitted,
     C. GREGORY STEWART, General Counsel
     PHILIP B. SKLOVER, Associate General Counsel
     LORRAINE C. DAVIS, Assistant General Counsel


         ROBERT J. GREGORY, Senior Attorney
         EQUAL EMPLOYMENT OPPORTUNITY
         COMMISSION
         1801 L Street, N.W.
         Washington, D.C. 20507
         September 6, 2000

 CERTIFICATE OF COMPLIANCE

  I, Robert J. Gregory, hereby certify that this brief complies with
  the type-volume limitations imposed under F.R.A.P. 32(a)(7)(B)(i).
  The brief contains 13,470 words.


         Robert J. Gregory

 CERTIFICATE OF SERVICE

  I, Robert J. Gregory, hereby certify that on this 6th day of September,
  2000, two copies of the attached brief were sent by first-class mail,
  postage prepaid, to each of the following counsel of record:
     Mark J. Neuberger
     Jeffrey M. Goodz
     Buchanan Ingersoll
     Professional Corporation
     Suite 606, One Turnberry Place
     19495 Biscayne Boulevard
     Aventura, Florida 33180

     Bruce D. Cohen
     Smith, Gambrell & Russell, LLP
     Suite 3100, Promenade II
     1230 Peachtree Street, N.E.
     Atlanta, Georgia 30309-3592




         Robert J. Gregory





 ADDENDUM


 1  This opinion is attached as an addendum to this brief.

 2  Winnemore was 67 at the time of his termination.  Doc.71-Pg.7.

 3  In its initial position statement, Complete Dewatering asserted
 that Winnemore had quit his position as branch manager.  Doc.117-Exh.4.
 In its motion for summary judgment, Complete Dewatering admitted that
 Winnemore had in fact been terminated from his job.  Doc.66-Pg.10.

 4  Complete Dewatering's evidentiary theory was that Mogle was not
 involved in the decision to terminate Winnemore's employment because
 Winnemore was actually terminated in March 1990, when, as a result
 of his meeting with Share, Winnemore began receiving compensation
 on a commission-only basis.  Doc.66-Pg.10.  Although the Commission
 disputed the March 1990 termination date (claiming that the actual
 date of termination was May 1990, when Mogle instructed Winnemore to
 "clean out" his desk because we "just don't need you any longer"), the
 precise date of termination is largely beside the point.  Even assuming
 a March 1990 termination date, there is compelling evidence that Mogle
 was instrumental in the events leading up to (and including) the March
 1990 meeting with Winnemore.

 5  The evidence shows that Mogle informed Winnemore, the day he told
 Winnemore to "clean out [his] desk," that the company had "just replaced
 [him]" with "a man in your office down there now that Frank Hornbrook
 took down to introduce him to . . . [Cipully]."  Doc.71-Pg.49.  Hornbrook
 did indeed show up at the Davie facility, with Timothy Fruits in tow,
 explaining to Cipully that Fruits was there to take Winnemore's job.
 Doc.76-Pgs.15-17,61-62.  Mogle's statement to Winnemore qualifies as
 an "admission" for hearsay purposes.  See Fed.R.Evid. 801(d)(2)(D).
 So too does Hornbrook's statement to Cipully, since the evidence supports
 a finding that Hornbrook was acting within "the scope of his agency"
 (as Mogle's messenger) in communicating the news about Fruits.  Id.
 See generally Wilkinson v. Carnival Cruise Lines, Inc., 920 F.2d 1560,
 1564-66 (11th Cir. 1991) (stressing that out-of-court statements of
 even "low-level employees" are admissible under Rule 801(d)(2)(D) so
 long as there is evidence "that the content of the declarant's statement
 concerned a matter within the scope of his agency").

 6  This case was argued in May 1999, before Judge Cox, Judge Hull, and
 Judge Cohill (sitting by designation).  An oral argument was originally
 scheduled for January 14, 1999, before a different panel of judges (Judge
 Tjoflat, Judge Carnes, and Judge Black).  That argument was postponed,
 at the request of Complete Dewatering, because its lead attorney was
 involved in an accident the weekend before the scheduled oral argument.

 7  The panel did not accept Complete Dewatering's argument that Cipully
 could not be viewed as Winnemore's replacement because Cipully "was
 only temporarily designated as the person in charge of the facility."
 Complete Dewatering Brief at 37.

 8  The Commission also pointed out that the panel's theory for rejecting
 the Cipully replacement evidence was not supported by the record evidence.
 While the panel cited to a snippet of Share's deposition testimony in
 support of its assertion that Hornbrook assumed the "sales aspects" of
 Winnemore's job, slip op. at 7-8, there was nothing in this testimony
 about Hornbrook assuming Winnemore's job responsibilities as branch
 manager.  To the contrary, Share implied that the sales duties in the
 region were to be split between Hornbrook, who had already been brought in
 to provide additional sales support, and Cipully, who was taking over for
 Winnemore.  Doc.72-Pg.42.  In its statement of undisputed material facts,
 Complete Dewatering stated that, after Winnemore's departure, Hornbrook
 "continued to try and develop sales in South Florida . . . [a]long with
 Cipully as acting branch manager."  Doc.65-Pg.11 (emphasis added).

 9  Judge Turnoff seemed puzzled that this evidence had escaped the
 attention of Judge King, who had ruled on Complete Dewatering's motion
 for summary judgment.  Judge Turnoff pointedly asked, "[w]as all of
 this presented to Judge King on summary judgment?"  Doc.157-Pg.21.
 The Commission assured Judge Turnoff that the evidence had in fact been
 presented to Judge King.  Doc.157-Pg.22.

 10  The Court adopted this dual standard despite the fact that Title VII's
 fee-shifting provision draws no explicit distinction between prevailing
 plaintiffs and prevailing defendants.  See 42 U.S.C.  2000e-5(k).

 11  The fact that an individual receives payment on a commission-only
 basis does not, as a matter of law, deprive the individual of his status
 as an "employee."  See National Mut. Ins. Co. v. Darden, 503 U.S. 318,
 323-34 (1992) (listing the "'method of payment'" as merely one factor
 bearing on whether an individual qualifies as an employee; "'all of the
 incidents of the relationship must be assessed and weighed with no one
 factor being decisive'").

 12  This Court did not agree with the district court's erroneous ruling
 that the replacement evidence was the product of speculative "hearsay."
 See supra n.5 (discussing the hearsay issue).  Notably, the district court
 reiterated the mistaken hearsay theory at the fees stage of the case.
 Doc.135-Pg.8 (citing this as one of the grounds for overturing the
 magistrate's recommendation).

 13  Complete Dewatering turned to this new argument when it became clear
 that its litigating position in the district court
 -- Cipully could not be used to satisfy the replacement element of the
 prima facie case because he was also a member of the protected class --
 was foreclosed by Supreme Court precedent.  See O'Connor v. Consolidated
 Coin Caterers Corp., 517 U.S. 308 (1996).