SERVED: March 30, 2015 

U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASHINGTON, DC 

Application of 

TGI FREIGHT, INC. 

FDMS No. FAA-2013- 0720 

Successor to DMS No. FAA-2010-1079 

(Equal Access to Justice Action) 

INITIAL DECISION 

'··.-·-:-

DENYING APPLICATION FOR ATTORNEY'S FEES AND OTHER EXPENSES 

I. Key terms 

Alaska 

EAJA 

FAA 

Hazmat 

I. D. 

Lockheed 

MSDS 

Parsons 

Pro Poxy 

TGI 

II. Background 

Alaska Airlines 

Equal Access to Justice Act, 5 US. C. §504 

Federal Aviation Administration 

Hazardous Materials 

Initial Decision 

Lockheed Martin 

Material Safety Data Sheet1 

Parsons Corporation 

Pro-Poxy 400 

TGI Freight and/or Applicant 

; " t _ _. 

This application under the Equal Access to Justice Act (hereinafter "EAJA"), 5 U.S. C. 

§504, originated from a proceeding in which the Federal Aviation Administration (hereinafter 

"FAA'') charged TGI Freight (hereinafter "TGI" or "Applicant") with violations of Department 

of Transportation Hazardous Materials Regulations. 

1 MSDS is an Occupational Safety and Health Administration ("OSHA") document whose primary purpose is to 

convey safety information to individuals working with that material. 

1 
The parties were in general agreement on the facts. The FAA hired Lockheed Martin 

("Lockheed") and the Parsons Corporation ("Parsons") to install, under a Parsons technicalservices contract, a weather camera at the Misty Fjords National Monument.· The location was 

on New Eddystone Island, near Ketchikan, AK. As a result, certain materials had to be shipped 

by air from Anchorage to Ketchikan. Typically the contractor's shipping at the origination point 

was handled by the FAA at its logistics complex at the Anchorage airport. Parsons normally 

consolidated the materials, segregating known or suspected hazardous materials ("hazmats") on 

separate pallets or containers. It then turned.the load over to the FAA's logistics manager, 

identifying the possible hazmats. FAA policy was to bring the hazmats to the TG I for 

manifesting and shipping. TGI moved freight and performed hazardous materials packaging and 

certification. 

The product central to the dispute was Pro-Poxy 400 ("Pro-Poxy"). Pro-Poxy was 

manufactured by a company called Unitex. It was tendered for shipment in four fiberboard 

boxes as part of a six-box shipment. Each ofthe four boxes contained twelve (12) 9.3-ounce 

(275 ml) tubes of the material. The writing on the boxes' exteriors described Pro-Poxy as an 

epoxy acrylate anchoring gel used in concrete stone masonry. It was to be used to cement the 

base of the camera onto the rock. The word "adhesive" was written on the boxes' exteriors. 

Parsons, in consolidating the items, determined that Pro-Poxy was a hazardous material and duly 

segregated it from the rest of the shipment. 

On February 19, 2010;TGI offered the four (4) boxes ofPro-Poxy to AlaskaAirlines 

("Alaska") for shipment from Anchorage, AK, to Ketchikan, AK. The air waybill, which 

included two (2) other boxes in the shipment, described the shipment as a whole as 

"miscellaneous non-hazardous tools & construction,material". The shipper initialed the box 

stating "This shipment does not contain dangerous goods" (underlining in original). 

Alaska decided that further investigation was warranted. Examination of the MSDS led 

Alaska to conclude that Pro-Poxy was a hazardous material. Alaska held the four (4) suspect 

boxes at its Anchorage Airport facility. Alaska notified a FAA hazardous materials specialist of 

the situation the same day. Allegations were the shipment, was undeclared. 2 

The FAA brought action against TGI. The FAA cited TGI for the following sixteen 

HMR violations of Hazardous Materials Transportation Act, 49 US. C. §§51 01-5127 ("the Act"), 

49 C.F.R.: §171.2(e), in offering a hazardous material for transportation in commerce when the 

material was improperly classed, described, packaged, marked, and labeled for shipment; 

§ 172.200(a), in offering hazardous material without properly describing the material on shipping 

papers; § 172.201 (d), offering hazardous material without including an emergency response 

telephone number; § 172.202(a)(1 ), offering a hazardous material without including its proper 

identification number; § 172.202(a)(2), offering a hazardous material without including the 

proper shipping name; § 172.202(a)(3), offering a hazardous material without including the 

hazard class or division number prescribed for the material; § 172.202( a)( 4 ), offering a hazardous 

material when the description did not include the assigned packing group; § 173.204(a) or (c)(l ), 

in offering hazardous material without printing the proper certification on the shipping papers; 

2 "Undeclared" means that it lacked any notice ofthe hazardous nature of the product within. Midtown Neon Sign 

Corporation, FAA Order No. 96-26 (August 13, 1996), p. 2. 

2 
§ 172.204( c )(2), failing to provide two copies of the shipper's certification; § 172.204( c )(3), 

offering hazardous material without adding to the shipper's certification a statement declaring 

that all air transport requirements were met; §§ 172.300 and 172.301(a), offering hazardous 

material in a package not marked with the proper shipping names and identification numbers for 

its contents; § 172.400(a), offering an improperly labeled hazardous materials package; and 

§§172.600(c)(l) and (c)(2), offering hazardous material when emergency response information 

was not immediately available. 

The FAA asked for a civil penalty under 49 U.S. C. §5123(a) and 14 C.P.R. § 13.305(d) of 

$15,000. 

Respondent denied the charges. 

We held an evidentiary hearing in Anchorage, AK, on September 20 and 21, 2012. 

III. Underlying Initial Decision 

In the underlying case we found and concluded the FAA failed to prove the allegations of 

the Complaint. The Complaint was dismissed. 3 

The FAA appealed but subsequently withdrew it appeal whereupon the FAA's Appeal 

was dismissed.4 

IV. EAJA Petition 

TGI filed a timely "Motion for Fees and Costs"5 (hereinafter "Motion for Fees") which 

we treated as an EAJA application. TGI averred it was the prevailing party and recited facts 

from the underlying case. TGI attached an Affidavit to its motion averring" ... the FAA's 

Complaint in this matter was not substantially justified ... ," quoted portions of our underlying 

Initial Decision and set forth its claim for attorney and paralegal fees and additional costs. TGI 

cited Green Aviation6as authority for award of fees and costs. 

The FAA, in its Opposition,7 averred" ... the EAJA does not apply to hazardous materials 

cases ... " citing Dominion Concepts. 8 . 

3 In the Matter ofTGI Freight, FAA 2010- 1079, served October 29,2013. 4 In the Matter ofTGI Freight, FAA Order no. 2013-7, served December 20,2013. . 5 "Motion for Fees and Costs", dated 11 November 2013. 5 U.S. C. §504(a)(2): " ... A party seeking an award of fees 

and other expenses shall, within thirty days of a final disposition in the adversary adjudication ... " (hereinafter 

"TGI's Motion for Fees"). 6 Green Aviation Management Co. vs. Federal Aviation Administration, 676 F. 3D 200,202 (April 17, 2012). 7 "Administrator's Opposition to TGI Freight's Application for Attorney's Fees and Expenses", dated November 20, 

2013. 

8 FAA Order No. 2005-4, 2005 WL 916050, at #3 (March 8, 2005). 

3 
TG I rebutted9 that Dominion " ... is an opinion based solely on the findings of the 

FAA ... it is not legal precedent ... Rather, it is the agency's interpretation of Congress' intent 

with respect to 49 US. C.§ 123 and the Equal Access to Justice Act..." 10 TGI cited Lane v. U.S. 

Dept. of Agriculture 11 and Aageson Grain and Cattle v. U.S. Dept. of Agriculture. 12 

The FAA responded 13 averring " ... TGI does not cite 14 C.F.R., part 14, which contains 

the Agency's regulations implementing the Equal Access to Justice Act, and no net worth 

exhibit, which is required by 14 C. FR. § 14.10 was included." 14 The FAA further stated: 

... there are a number of requirements that must be met in order for an entity to be 

eligible for an award under EAJA. One of these is that the entity have a net worth 

that is less than the maximum specified for it in the statute. As an eligibility 

criterion, it is a matter that the application must establish, and of which the 

Agency's regulations (14 C.F.R. §19(b)) require proof as part of the application. 

Because TGI Freight has failed to submit such proof, it has failed to establish its 

eligibility. 

The FAA also alleged TGI's application should be denied because" ... the Agency was 

substantially justified in proceeding as it did in this matter ... " 15 citing In the Matter of Richard 

W Kuhling. 16 

V. Law and Standards 

EAJA is set forth in 5 U.S. C. §504 which provides in pertinent part: 

(a)(l) An agency that conducts an adversary adjudication shall award, to a 

prevailing party other than the United States, fees and other expenses incurred by 

that party in connection with that proceeding, unless the adjudicative officer of 

the agency finds that the position of the agency was substantially justified or that 

special circumstances make an award unjust. Whether or not the position of the 

agency was substantially justified shall be determined on the basis of the 

administrative record, as a whole, which is made in the adversary adjudication for 

which fees and other expenses are sought. 

(2) A party seeking. an award of fees and other expenses shall, within thirty days 

of a final disposition in the adversary adjudication, submit to the agency an 

application which shows that the party is a prevailing party and is eligible to 

9 "Reply to Complainant's Opposition to Motion for Fees and Costs", dated I 0 December 2013. 10 Id at pages 1 and 2. 11 120F.3d 106(8111 Cir.l997). 12 500 F. 3d I 038 (91

h Cir. 2007). 13 "Agency's Response to Applicant's Reply toComplainant's Opposition to TGI Freight's Application for 

Attorney's Fees and Expenses" dated January 16,2014: 14 Id. page 1. 15 Id at page 3. 16 FAA Order No. 2005-13 (August 15, 2005) at 4-5. 

4 
receive an award under this section, and the amount sought, including an itemized 

statement from any attorney, agent, or expert witness representing or appearing in 

behalf of the party stating the actual time expended and the rate at which fees and 

other expenses were computed. The party shall also allege that the position of the 

agency was not substantially justified. When the United States appeals the 

underlying merits of an adversary adjudication, no decision on an application for 

fees and other expenses in connection with that adversary adjudication shall be 

made under this section until a final and umeviewable decision is rendered by the 

court on the appeal or until the underlying merits of the case have been finally 

determined pursuant to the appeal. 

(3) The adjudicative officer of the agency may reduce the amount to be awarded, 

or deny an award, to the extent that the party during the course of the proceedings 

engaged in conduct which unduly and umeasonably protracted the final resolution 

ofthe matter in controversy. The decision ofthe adjudicative officer of the 

agency under this section shall be made a part of the record containing the final 

decision of the agency and shall include written findings and conclusions and the 

reason or basis therefor. The decision of the agency on the application for fees 

and other expenses shall be the final administrative decision under this section. 

( 4) If, in an adversary adjudication arising from an agency action to enforce a 

party's compliance with a statutory or regulatory requirement, the demand by the 

agency is substantially in excess ofthe decision of the adjudicative officer and is 

umeasonable when compared with such decision, under the facts and 

circumstances of the case, the adjudicative officer shall award to the party the fees 

and other expenses related to defending against the excessive demand, unless the 

party has committed a willful violation of law or otherwise acted in bad faith, or 

special circumstances make an award unjust. Fees and expenses awarded under 

this paragraph shall be paid only as a consequence of appropriations provided in 

advance. 

(b )(1) For the purposes of this section--

(A) "fees and other expenses" includes the reasonable expenses of expert 

witnesses, the reasonable cost of any study, analysis, engineering report, test, or 

project which is found by the agency to be necessary for the preparation of the 

party's case, and reasonable attorney or agent fees (The amount of fees awarded 

under this section shall be based upon prevailing market rates for the kind and 

quality of the services furnished, except that (i) no expert witness shall be 

compensated at a rate in excess of the highest rate of compensation for expert 

witnesses paid by the agency involved, and (ii) attorney or agent fees shall not be 

awarded in excess of $125 per hour unless the agency determines by regulation 

that an increase in the cost of living or a special factor, such as the limited 

availability of qualified attorneys or agents for the proceedings involved, justifies 

a higher fee.); 

5 
(B) "party" means a party, as defined in section 551(3) ofthis title, who is (i) an 

individual whose net worth did not exceed $2,000,000 at the time the adversary 

adjudication was initiated, or (ii) any owner of an unincorporated business, or any 

partnership, corporation, association, unit oflocal government, or organization, 

the net worth of which did not exceed $7,00b,OOO at the time the adversary 

adjudication was initiated, and which had not more than 500 employees at the 

time the adversary adjudication was initiated; except that an organization 

described in section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. 

501(c)(3)) exempt from taxation under section 501(a) of such Code, or a 

cooperative association as defined in section 15(a) of the Agricultural Marketing 

Act (12 U.S.C. 1141j(a)), may be a party regardless of the net worth of such 

organization or cooperative association or for purposes of subsection (a)( 4), a 

small entity as defined in section 601; 

(C) "adversary adjudication" means (i) an adjudication under section 554 of this 

title in which the position of the United States is represented by counsel or 

otherwise, but excludes an adjudication for the purpose of establishing or fixing a 

rate or for the purpose of granting or renewing a license, (ii) any appeal of a 

decision made pursuant to section 71 03 of title 41 before an agency board of 

contract appeals as provided in section 71 05 of title 41, (iii) any hearing 

conducted under chapter 38 oftitle 31, and (iv) the Religious Freedom 

Restoration Act of 1993; 

(D) "adjudicative officer" mean,s the ·d~cidin;g official, without regard to whether 

the official is designated as an administ~ative law judge, a hearing officer or 

examiner, or otherwise, who presided at the adversary adjudication; 

(E) "position of the agency" means, in addition to the position taken by the 

agency in the adversary adjudication, the action or failure to act by the agency 

upon which the adversary adjudication is based; except that fees and other 

expenses may not be awarded to a party for any portion of the adversary 

adjudication in which the party has unreasonably protracted the proceedings; and 

(F) "demand" means the express demand of the agency which led to the 

adversary adjudication, but does not include a recitation by the agency of the 

maximum statutory penalty (i) in the administrative complaint, or (ii) elsewhere 

when accompanied by an express demand for a lesser amount. 

The EAJA requires an agency conducting an "adversary adjudication" to award fees and 

other expenses to a prevailing party (other than the United States) unless the position of the 

agency was "substantially justified" or special circumstances make an award unjust (5 U.S. C. 

§504(a)(l)). The FAA's rules implementing the EAJA essentially track its language (see 14 

C.F.R. §14.04): ·~. 

(a) An application for an award of fees and expenses under the Act shall identify 

the applicant and the proceeding for which an award is sought. The application 

6 
shall show that the applicant has prevailed and identify the position of the agency 

in the proceeding that the applicant alleges was not substantially justified. Unless 

the applicant is an individual, the application shall also state the number of 

employees of the applicant and describe briefly the type and purpose of its 

organization or business. 

(b) The application shall also include a statement that the applicant's net worth 

does not exceed $2 million (if an individual) or $7 million (for all other 

applicants, including their affiliates) at the time the adversary adjudication was 

initiated. However, an applicant may omit this statement if: 

(1) It attaches a copy of a ruling by the Internal Revenue Service that it qualifies 

as an organization described in section 501 (c)(3) of the Internal Revenue Code 

(26 U.S.C. 50l(c)(3)), or in the case of a tax-exempt organization not required to 

obtain a ruling from the Internal Revenue Service on its exempt status, a 

statement that describes the basis for the applicant's belief that it qualifies under 

such section; or 

(2) It states that it is a cooperative association as defined in section 15( a) of the 

Agricultural Marketing Act (12 U.S.C. 114lj(a)). 

(c) The application shall state the amount of fees and expenses for which an 

award is sought. 

(d) The application may also include any other matters that the applicant wishes 

this agency to consider in determining whether and in what amount an award 

should be made. 

(e) The application shall be signed by the applicant or an authorized officer or 

attorney for the applicant. It shall also contain or be accompanied by a written 

verification under oath or under penalty of perjury that the information provided 

in the application is true and correct. 

The burden of proof that an award should not be made rests with the agency (14 C. F. R. 

§14. 04(a)). 

"Substantial justification" connotes an active, searching inquiry into the quality of 

evidence advanced and the overall reasonableness of the agency's position. United Brotherhood 

of Carpenters and Joiners v. NLRB, 891 F.2d 1160, 1163 (51

h Cir. 1990). The inquiry examines 

the totality of the circumstances surrounding the government's adoption of its position. Smith v. 

Principi, 343 F.3d 1358, 1362 (Fed.Cir. 2003). 

The FAA's position consists of more than the quality ofthe allegations of its complaint. 

It also comprises the agency's posture in supporting the allegations during the pendency of the 

proceeding. Krecioch v. United States, 316 F.3d 684, 689 (ih Cir. 2002). 

7 
An allegation is considered to be substantially justified when it has a reasonable basis in 

law and fact. Pierce v. Underwood, 487 U.S. 552, 565 (1988); 14 CFR 14. 04(a),· Michael 

Edward Wendt, FAA Order 93-9 (March 25, .1993), p. 3. The charge must be justified to the 

degree that could satisfy a reasonable person. The standard is met if there is a "genuine dispute," 

or if reasonable people could differ as to the appropriateness of the contested matter. Pierce v. 

Underwood, p. 565. The agency must show (a) a reasonable basis in truth for the facts alleged; 

(b) a reasonable basis in law for the legal theory propounded; and (3) a reasonable connection 

between facts and theory. Valley Air Services, Inc., FAA Order No. 95-27 (December 19, 1995), 

p. 6,pet. for reconsid. denied, FAA Order No. 96-15 (May 3, 1996); Smith v. National 

Transportation Safety Board, 992 F.2d 849, 852 (8th Cir. 1993). 

Failure to prevail does not raise a presumption of lack of substantial justification. An 

agency's defeat in the underlying action on the merits does not raise a presumption that its 

position was not substantially justified under EAJA (emphasis in original). Nancy Rene Floyd, 

FAA Order No. 2006-4,2006 WL 465372 (February 10, 2006), p. 5; S & H Riggers & Erectors 

v. OSHA, 672 F.2d 426, 430 (5th Cir. 1982). Nor must the agency demonstrate that it had a 

substantial likelihood of prevailing to prove that its litigation position was substantially justified. 

Kiareldeen v. Ashcroft, 273 F.3d 542, 554 (3rd Cir. 2001); Michael Edward Wendt, FAA Order 

93-9, 1993 WL 833111 (March 25, 1993). 

Turner v. N TS.B., held: 17 

" ... Because the EAJA is a statute of general application, we do not defer to the 

NTSB's or to any one agency's interpretation of it. See, e.g., Contractor's Sand & 

Gravel, Inc. v. Fed. Mine Safety & Health Review Comm'n, 199 F.3d 1335, 1339 

(D.C.Cir.2000) (court not "bound to defer to the agency's construction" of the 

EAJA because "[it] is a statute of general application and not one committed to 

administration by the Commission or the Secretary"). 

This court has distilled from Buckhannon18 a three-part test for determining whether a 

party has "prevailed": 

( 1) there must be a "court-ordered change in the legal relationship" of the parties; (2) the 

judgment must be in favor of the party seeking the fees; and (3) the judicial 

pronouncement must be accompanied by judicial relief. 

VI. Analysis 

In the United States, parties are ordinarily required to bear their own attorney's fees-the 

prevailing party is not entitled to collect from the loser. Under this "American Rule," we follow 

17 608 F.3d 12, 391 U.S.App.D.C. 90 (June 8, 2010) 18 Buckhannon Bd and Care Home, Inc. v. West Virginia Department of Health and Human Services, 532 U.S. 598, 

121 S.Ct. 1835 (May 29, 2001). See also Scarbrough v. Principi, 541 U.S. 401, 124 S.Ct. 1856 (May 3, 2004). 

8 
"a general practice of not awarding fees to a prevailing party absent explicit statutory 

authority." 19 

A. (5 US. C. §504(a)(l)): An agency that conducts an adversary adjudication shall 

award, to a prevailing party other than the United States, fees and other expenses 

incurred by that party in connection with that proceeding, unless the adjudicative 

officer ofthe agency finds that the position of the agency was substantially 

justified or that special circumstances make an award unjust. Whether or not the 

position of the agency was substantially justified shall be determined on the basis 

of the administrative record, as a whole, which is made in the adversary 

adjudication for which fees and other expenses are sought. 

After an evidentiary hearing and consideration of all the testimony and evidence we 

found and concluded that FAA failed to prove the allegations ofthe Complaint. The Complaint 

was dismissed. 

We found it was undisputed that TGI had actual knowledge of the facts giving rise to the 

violations alleged. We further opined it was neither alleged nor shown that TGI had actual 

knowledge that it had offered hazardous materials. We reasoned " ... In this situation the law 

defaults to the Act's subparagraph B: it charges Respondent with the knowledge that reasonable 

inquiry would have produced ... "

20 

We noted the FAA read the statute differently. It contended that because a substance's 

nature, i.e. whether a hazmat or not, was a question of law and not of fact, it was not necessary to 

show that the entity offering a shipment was aware that the shipment contained hazmats. If 

Respondent knew that it tendered four (4) fiberboard boxes ofPro-Poxy, then it inexorably 

followed, the FAA contended, that TGI was liable for the HMR violations with which it is 

charged. The law's duty of inquiry, the FAA asserted, referred only to the shipper's duty to 

know what it is shipping. 

We found:· 

This argument is rejected. It is not the law. The question of a substance's nature 

is separate from the issue of a shipper's responsibility. Moreover, Complainant's 

(FAA's) formulation effectively eliminates the duty of inquiry plainly contained 

in the statute. The FAA would foreclose, and render meaningless, the statute's 

subsection creating the shipper's duty of reasonable care in the circumstances. 

See §5123(a)(l)(B), at I.D., p. 4. The agency's (FAA) analysis violates one of 

the fundamental interpretive canons of statutory construction -- that "a statute 

should be construed so that effect is given to all its provisions, so that no part will 

be inoperative or superfluous, void or insignificant." Corley v. US., 556 U.S. 303, 

314 (2009). 

19 Buckhannon Bd and Care Home, Inc. v. West Virginia Department of Health and Human Services, 532 U.S. 598, 

121 S.Ct. 1835. at page 6. 20 In the Matter ofTGI Freight, OMS FAA 2010- 1079, 1.0., page 6. 

9 
This leads us to the next question: whether Respondent's (TGI's) inquiry into the 

nature of the shipment was reasonable under the circumstances. I find that it was. 

Prompted by the trigger terms "adhesive" and "epoxy," TGI opened the exterior 

packaging and inspected the unit tendered, which was the tubes. It found no 

marking or labeling, no language or symbols, suggesting a risk of fire, toxicity, 

corrosiveness, or similar perils of the kind and quality customarily associated with 

hazmats. To end the inquiry at that point was a reasonable response, I find ... 21 

Complainant (FAA) would have had Respondent (TGI) continue its investigation 

further, either by pulling the MSDS or by contacting Pro-Poxy's manufacturer. It 

argues that because some epoxy materials and some adhesives are in fact 

hazardous, Respondent (TGI) did not carry its investigation far enough. Had TGI 

appropriately persevered, it would have discovered that Pro-Poxy was a regulated 

material. It must be held responsible for the consequences, the agency (FAA) 

concludes. 

This argument also may not stand. The fact that some substances in a certain 

classification prove to be hazardous does not warrant that all within that grouping 

compel the kind of scrutiny necessary to uncover their underlying nature. The 

law does not place such a broad, far-reaching obligation on shippers. The agency 

(FAA) unjustifiably enlarges the meaning of"reasonable." 

The evidence in this case highlights the FAA's overreach?2 

Finally, I cannot subscribe to Complainant's (FAA's) assertion that because 

Respondent (TGI) held itself out as having particular expertise in the transport of 

hazardous materials, a greater duty of care devolved upon it. There is no 

authority for such a proposition. The statute commands that every shipper be held 

to the same standard of care - what is reasonable under the circumstances. 23 

B. (5 US. C. §504(a)(2)) reads: 

A party seeking an award of fees and other expenses shall, [emphasis added] 

within thirty days of a final disposition in the adversary adjudication, submit to 

the agency an application which shows that the party is a prevailing party and is 

eligible to receive an award under this section, and the amount sought, including 

an itemized statement from any attorney, agent, or expert witness representing or 

appearing in behalf of the party stating the actual time expended and the rate at 

which fees and other expenses were computed. The party shall also allege that 

the position ofthe agency was not substantially justified. When the United States 

appeals the underlying merits of an adversary adjudication, no decision on an 

application for fees and other ex,penses in cop.nection with that adversary 

adjudication shall be made under this section until a final and unreviewable 

21 Id., page 7. 22 Id. 

23 Id. 

10 
decision is rendered by the court on the appeal or until the underlying merits of 

the case have been finally determined pursuant to the appeal. 

The FAA's rules implementing the statute track 5 US. C. §504 and are set forth 

hereinabove. (14 C.FR. §14.04). 

TGI's "Motion for Fees" was served November 11,2013, well within the thirty day 

period required by the statute and (14 C.FR. §14.04). 

In its "Motion for Fees" TGI asserted" ... there is no dispute that TGI prevailed on all 

allegations asserted against it in the Complaint ... "

24 thereby asserting it was the prevailing party. 

TGI's "Motion for Fees" included an itemized statement from TGI's attorney, agent, or 

expert witness representing or appearing in behalf of the party stating the actual time expended 

and the rate at which fees and other expenses were computed. 

TGI' s "Motion for Fees" alleged that the position of the FAA was not substantially 

justified citing language in our I.D?5 

It is also a requirement of 5 US. C. §504 and (14 C. FR. §14.04) that the" ... application 

which shows ... that the party is ... is eligible to receive an award under this section ... " 

5 US. C. §504 provides 

(b)(l) (B) "party" means a party, as defined in section 551(3) ofthis title, who 

is (i) an individual whose net worth did not exceed $2,000,000 at the time the 

adversary adjudication was initiated, or (ii) any owner of an unincorporated 

business, or any partnership, corporation, association, unit of local 

government, or organization, the net worth of which. did not exceed 

$7,000,000 at the time the adversary adjudication was initiated, and which 

had not more than 500 employees at the tj,~e the adversary adjudication was 

initiated; except that an organization described in section 501(c)(3) of the 

Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) exempt from taxation under 

section 501(a) of such Code, or a cooperative association as defined in section 

15(a) ofthe Agricultural Marketing Act (12 U.S.C. 1141j(a)), may be a party 

regardless of the net worth of such organization or cooperative association or for 

purposes of subsection (a)( 4), a small entity as defined in section 601 ... (emphasis 

added) 

The FAA's implementing regulation (14 C.FR. §14.04 (b)) states: 

The application shall also include a statement that the applicant's net worth does 

not exceed $2 million (if an individual) or $7 million (for all other applicants, 

including their affiliates) at the time the adversary adjudication was initiated. 

24 TGI's Motion for Fees, page 2. 25 !d., page 3. 

11 
In its "Reply to Complainant's Opposition to Motion for Fees and Costs" TGI asserted 

" ... TGI Freight is not a large company but a business that, in large part, deals with theshipment 

of hazardous materials in the highly unique U.S. market... TGI Freight is a small company ... "26 

TGI made no other assertions as to its net worth, ownership and/or number of employees as 

required by 5 US. C. §504, et al and 14 C.FR. §14.04 (b)) and provided no documentation to 

support the assertions in its application for fees. 

C. (1) there must be a "court-ordered change in the legal relationship" of the parties; 

With our dismissal of the FAA's Complaint, there was a change in the legal relationship 

of the parties. 

D. (2) the judgment must be in favor of the party seeking the fees; and 

TGI was the prevailing party and is the party seeking the fees.Z7 

E. (3) the judicial pronouncement must be accompanied by judicial relief. 

The judicial relief was dismissal of the FAA's complaint. 

VII. Findings 

A. Adversarial 

We find the FAA's proceeding against TGA was an adversary adjudication to enforce 

TGI's compliance with a statutory or regulatory requirement as set forth in the statute. 

B. Prevailing Party 

We find TGI was the prevailing party, there was a "court-ordered change in the legal 

relationship" of the parties; (2) the judgment was in favor of the party (TGI) seeking the fees; 

and (3) the judicial pronouncement was accompanied by judicial relief (dismissal of the 

complaint). (See Thomas v. Nat'! Sci. Found., 330 F.3d 486, 491 (D.C.Cir.2003). Turner v. 

N. T S. B., supra.) 

C. Application 

We find TGI's application identified the apphcant and the proceeding for which an award 

was sought. The application asserted that TGI was the prevailing party, contained an itemization 

of fees and other expenses incurred by that party in connection with that proceeding, and alleged 

the FAA's position was not substantially justified. 

26 TGI's "Reply to Complainant's Opposition to Motion for Fees and Costs", page 5 and 6. 27 See Thomas v. N.S.F., 330 F.3d 486, 356 U.S.App.D.C. 222 (June 3, 2003). 

12 
The application failed to identify whether the applicant was an individual, failed 

to state the number of employees of the applicant and failed to describe briefly the type 

and purpose of its organization or business. 

The application also failed to include a statement that the applicant's net worth did 

not exceed $2 million (if an individual) or $7 million (for all other applicants, including 

their affiliates) at the time the adversary adjudication was initiated. 

TGI failed to establish it was a party entitled to relief under 5 US. C. §504, et seq, 

and/or 14 C.F.R. 14.10. 

D. Applicability to Hazardous materials cases ' 

The FAA, relying on Dominion Concepts, argued that the FAA Administrator found 

" ... the EAJA does not apply to hazardous materials cases ... " 

The court held in Turner v N T.S.B. 28 

Because the EAJA is a statute of general application, we do not defer to the 

NTSB's or to any one agency's interpretation of it. See, e.g., Contractor's Sand & 

Gravel, Inc. v. Fed. Mine Safety & Health Review Comm'n, 199 F.3d 1335, 1339 

(D.C.Cir.2000) (court not "bound to defer to the agency's construction" of the 

EAJA because "[it] is a statute of general application and not one committed to 

administration by the Commission or the Secretary"). 

We need not decide this issue as the EAJA application can be decided on other 

grounds. 

E. Substantial Justification 

As set forth hereinabove, "Substantial justification" connotes an active, searching inquiry 

into the quality of evidence advanced and the overall reasonableness of the agency's position. 

The inquiry examines the totality ofthe circumstances surrounding the government's adoption of 

its position. 

An allegation is considered to be substantially justified when it has a reasonable basis in 

law and fact. The charge must be justified to the degree that could satisfy a reasonable person. 

The standard is met ifthere is a "genuine dispute," or if reasonable people could differ as to the 

appropriateness of the contested matter. The agency must show (a) a reasonable basis in truth 

for the facts alleged; (b) a reasonable basis in law for the legal theory propounded; and (3) a 

reasonable connection between facts and theory. 

Failure to prevail does not raise a presumption of lack of substantial' justification. An 

agency's defeat in the underlying action on the merits does not raise a presumption that its 

position was not substantially justified under EAJA (emphasis in original). Nor must the agency 

28 608 F.3d 12, C.A.D.C. (2010). 

13 
. demonstrate that it had a substantial likelihood of prevailing to prove that its litigation position 

was substantially justified. 

We need not decide this issue as the EAJA application can be decided on other grounds. 

VIII. Conclusions 

TGI has failed to allege and/or prove it is a party entitled to relief under 5 US. C. 

§504, et seq, and/or 14 C.FR. 14.10. by failing to file a complete application. The 

application failed to identify whether the applicant was an individual, failed to state the 

number of employees of the applicant and failed to describe briefly the type and purpose 

of its organization or business. The application also failed to include a statement that the 

applicant's net worth did not exceed $2 million (ifan individual) or $7 million (for all 

other applicants, including their affiliates) at the time the adversary adjudication was 

initiated. 

5 US.C. §504 states: 

(a) ... (2) A party seeking an award offees and other expenses shall, within thirty 

days of a final disposition in the adversary adjudication, submit to the agency an 

application which shows that the party is a prevailing party and is eligible to 

receive an award under this section, and the amount sought, including an 

itemized statement from any attorney, agent, or expert witness representing or 

appearing in behalf of the party stating the actual time expended and the rate at 

which fees and other expenses were computed. The party shall also allege that 

the position of the agency was not substantially justified. When the United States 

appeals the underlying merits of an adversary adjudication, no decision on an 

application for fees and other expenses in connection with that adversary 

adjudication shall be made under this section until a final and unreviewable 

decision is rendered by the court on the appeal or until the underlying merits of 

the case have been finally determined pursuant to the appeal ... (emphasis added) 

(b)(l) For the purposes ofthis section--

(B) "party" means a party, as defined in section 551(3) ofthis title, who is (i) an 

individual whose net worth did not exceed $2,000,000 at the time the adversary 

adjudication was initiated, or (ii) any, owner of an unincorporated business, or any 

partnership, corporation, association, unit of local government, or organization, the 

net worth of which did not exceed $7,000,000 at the time the adversary adjudication 

was initiated, and which had not more than 500 employees at the time the adversary 

adjudication was initiated ... (emphasis added) 

) 

The FAA's implementing regulation (see 14 C.F.R. §14.04) states: 

14 
(b) The application shall also include a statement that the applicant's net 

worth does not exceed $2 million (if an individual) or $7 million (for all other 

applicants, including their affiliates) atthe time the adversary adjudication 

was initiated ... (emphasis added) 

" ... No EAJ A application can be considered and fees awarded until all of the 

jurisdictional requirements are met ... (apfellant may not be awarded attorney's fees under the 

EAJA unless all requirements are met)". 2 "Since the EAJA is a waiver of the sovereign 

immunity of the United States, its provisions are to be strictly construed in the government's 

favor". 30 "Under the EAJA, the appellant is also required to show that he or she is a party 

eligible for an EAJA award". 31 "An EAJA applicant must meet a net worth requirement by 

indicating a net worth not exceeding $2,000,000 ... Although a Court retains "substantial 

discretion" in fixing the amount of an EAJA award, eligibility for such an award must be 

established by meeting the conditions of ... The eligibility provision pertains to eligibility at the 

time the appeal was filed. A showing of eligibility may be made by stating in the application 

that the appellant's net worth at the time the appeal was filed did not exceed $2 million"?2 

To date no information has been submitted which would show that TGI was an eligible 

party nor had its application been amended . 

. . . Although the above cited cases all deal with late filed applications rather than 

an application which is timely filed but defective, the rationale requiring strict 

construction which bars an action on the former also applies to and bars an action 

on the latter. The statutory language and legislative history ofthe EAJA, although 

not couched in the language of jurisdiction, indicate that Congress intended the 

filing deadlines to be strictly enforced and considered the showing of eligible 

status to be an integral part of filing. The statute states in plain language that a 

party seeking fees "shall, within thirty days of final judg-ment in the action, 

submit to the court an applicatiqn ... w~ich ~nows that the party ... is eligible to 

receive and award under this subsection ... Nothing in the language of the statute 

or its leg-islative history suggests that a defective application which is not 

completed until after the 30 day limit has run is any less fatal to a court's 

jurisdiction than a late filed application. Indeed, the requirement of showing 

eligible status is contained in the same sentence as the 30 day filing . 33 reqmrement ... 

We find that satisfying eligibility for an EAJA award is jurisdictional. 

Failure to allege eligibility is a jurisdictional defect. 

29 Bazalo v. Brown, 9 Vet.App. 304,65 USLW 2192 (Aug 16, 1996) at page 7. 

3o Id. 31 Id, at page 8 .. 32 Id. 33 U.S v. Hopkins Dodge Sales, Inc., 707 F.Supp. 1078 (Feb 2, 1989), at page 3. See also Scarbrough v. Principi, 

541 U.S. 401, 124 S.Ct. 1856 (May 3, 2004); Soriano v. U.S., 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (Jan 14, 

1957). 

15 

·' t···· 
In view of the foregoing, we deny TGI's Motion for Fees and Costs in its ehtirety. 34 

Richard C. Goodwin 

U.S. Administrative Law Judge 

Attachment - Service List 

34 This decision becomes final 30 days after its issuance unless a party appeals or the FAA Decisionmaker takes 

review under his/her own initiative. 14 C.F.R. § 14.28(a). The appeal must be either (a) mailed to the Federal 

Aviation Administration, 800 Independence Avenue, S.W .. , Washington, D.C. 20591, Attention: Hearing Docket 

Clerk, AGC-430, Wilbur Wright Building- Suite 2Wl 000; or (b) delivered personally or via expedited courier 

service to the Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building- Suite 

2WIOOO, Washington, D.C. 20591, Attention: Hearing Docket Clerk, AGC-430. 

16 
j 

l 

j SERVICE LIST 

ORIGINAL & ONE COPY 

Federal Aviation Administration 

800 Independence Avenue, S. W. 

Washington, DC 20591 

Attention: Hearing Docket Clerk, AGC-430, 

Wilbur Wright Building-Suite 2W1000 1 

ONE COPY 

Law Offices of Hozubin & Moberly, Respondent's .Counsel 

711 M Street, Suite 2 

Anchorage, AK 99501 

TEL: 907-276-5297 

FAX: 907-276-5291 

Howard L. Martin, Jr., Complainant's Counsel 

Regional Counsel, Office of Regional Counsel, AAL-7 

Alaskan Region 

Federal Aviation Administration 

222 W. i 11 Avenue #14 

Anchorage, AK 99513-7587 

TEL: 907-271-5273 

FAX: 907-271-2800 

The Honorable Richard C. Goodwin, Administrative Law Judge 

U.S. Department of Transportation 

Ot1ice of Hearings, M-20, 

1200 New Jersey Avenue, S.E.(E 11-31 0) 

Washington, DC 20590 

TEL: Staff Assistant 202-366-5121 

FAX: 202-366-7536 

FDMS No. FAA-20 13-720 

Successor to FAA-20 I 0-1079 

(EA.TA) 

1 Service was by U.S. Mail. For service in person or by expedited courier, use the following address: Federal 

Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-Suite 2Wl000, Washington, 

DC 20591; Attention: Hearing Docket Clerk, AGC-430. 

17