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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2017 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 2017

    To amend the provisions of titles 5 and 28, United States Code, 
  relating to equal access to justice, award of reasonable costs and 
  fees, and administrative settlement offers, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           November 16, 2005

Mr. Feingold (for himself and Ms. Snowe) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 
    To amend the provisions of titles 5 and 28, United States Code, 
  relating to equal access to justice, award of reasonable costs and 
  fees, and administrative settlement offers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equal Access to Justice Reform Act 
of 2005''.

SEC. 2. FINDINGS AND STATEMENT OF PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) the Equal Access to Justice Act (Public Law 96-481; 94 
        Stat. 2325 et seq.) (in this section referred to as ``EAJA'') 
        was intended to make the justice system more accessible to 
        individuals of modest means, small businesses, and nonprofit 
        organizations (in this section collectively referred to as 
        ``small parties'') through limited recovery of their attorneys' 
        fees when they prevail in disputes with the Federal Government; 
        and
            (2) although EAJA has succeeded, at modest cost, in 
        improving access to the justice system for small parties, EAJA 
        retains formidable barriers to attorneys' fees recovery (even 
        for small parties that completely prevail against the 
        Government), as well as inefficient and costly mechanisms for 
        determining the fees recovery.
    (b) Purpose.--It is, therefore, the purpose of this Act to remove 
existing barriers and inefficiencies in EAJA in order to--
            (1) equalize the level of accountability to Federal law 
        among governments in the United States;
            (2) discourage marginal Federal enforcement actions 
        directed at small parties;
            (3) reduce the practice of paying EAJA liabilities from the 
        General Treasury, to ensure that Federal agencies properly 
        consider the financial consequences of their actions and 
        subsequent impact on the Federal budget;
            (4) refine and improve Federal policies through 
        adjudication;
            (5) promote a fair and cost-effective process for prompt 
        settlement and payment of attorneys' fees claims; and
            (6) provide a fairer opportunity for full participation by 
        small businesses in the free enterprise system, further 
        increasing the economic vitality of the Nation.
    (c) Compliance Policy.--In complying with the statement of 
congressional policy expressed in this section, each Federal agency, to 
the maximum extent practicable, should--
            (1) avoid unjustified enforcement actions directed at small 
        parties covered by EAJA;
            (2) encourage settlement of justified enforcement actions 
        directed at small parties covered by EAJA; and
            (3) minimize impediments to prompt resolution and payment 
        of reasonable attorneys' fees to prevailing small parties 
        covered by EAJA.

SEC. 3. REPORTING AND TECHNICAL ASSISTANCE BY OFFICE OF ADVOCACY.

    (a) Functions of Office of Advocacy.--Section 202 of Public Law 94-
305 (15 U.S.C. 634b) is amended--
            (1) in paragraph (3), by inserting before the semicolon at 
        the end the following: ``and for ensuring that the justice 
        system remains accessible to small businesses for the 
        resolution of disputes with the Federal Government''; and
            (2) by striking paragraph (11) and inserting the following:
            ``(11) advise, cooperate with, and consult with the 
        President and Attorney General with respect to section 303(b) 
        of the Small Business Economic Policy Act of 1980 (15 U.S.C. 
        631b(b)) and section 504(e) of title 5, United States Code; 
        and''.
    (b) Duties of Office of Advocacy.--Section 203 of Public Law 94-305 
(15 U.S.C. 634c) is amended--
            (1) in paragraph (2), by inserting before the semicolon at 
        the end the following: ``, including the resolution of disputes 
        with the Federal Government and the role of procedures 
        established by the Equal Access to Justice Act (Public Law 96-
        481; 94 Stat. 2325) in such disputes''; and
            (2) in paragraph (3), by inserting after ``the Small 
        Business Act'' the following: ``, including those related to 
        the Equal Access to Justice Act,''.
    (c) Reports to Congress.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Attorney General, in cooperation 
        with the Chief Counsel for Advocacy of the Small Business 
        Administration, shall transmit to the congressional committees 
        specified in paragraph (2) a report containing--
                    (A) an analysis of the effectiveness of the Equal 
                Access to Justice Act (Public Law 96-481; 94 Stat. 
                2325) (in this paragraph referred to as ``EAJA'') in 
                achieving its purpose to ease the burden upon small 
                businesses and other small parties covered by EAJA of 
                engaging in dispute resolution with the Federal 
                Government, including--
                            (i) the relative awareness of EAJA in the 
                        small business community;
                            (ii) the relative awareness of EAJA's 
                        requirements among Federal agencies;
                            (iii) the extent and quality of rules and 
                        regulations adopted by each Federal agency for 
                        processing, resolving, and paying attorneys' 
                        fees claims under EAJA;
                            (iv) the extent to which each Federal 
                        agency claims any exemptions in whole or in 
                        part from EAJA's coverage;
                            (v) the frequency or degree of use of 
                        EAJA's procedures by prevailing small 
                        businesses; and
                            (vi) an analysis of the costs and benefits 
                        of EAJA generally;
                    (B) an analysis of the variations in the frequency 
                and amounts of fee awards paid by specific Federal 
                agencies and within specific Federal circuits and 
                districts under section 504 of title 5, United States 
                Code, and section 2412 of title 28, United States Code, 
                including the number and total dollar amount of all 
                claims filed with, and all claims processed, settled, 
                litigated, and paid by, each agency under EAJA; and
                    (C) recommendations for congressional oversight or 
                legislative changes with respect to EAJA, including any 
                recommendations for promulgation or amendment of 
                regulations issued under EAJA by specific Federal 
                agencies.
            (2) Specified committees.--The congressional committees 
        referred to in paragraph (1) are the following:
                    (A) The Committee on the Judiciary and the 
                Committee on Small Business of the House of 
                Representatives.
                    (B) The Committee on the Judiciary and the 
                Committee on Small Business and Entrepreneurship of the 
                Senate.
            (3) Report on small business and competition.--Section 303 
        of the Small Business Economic Policy Act of 1980 (15 U.S.C. 
        631b) is amended--
                    (A) in subsection (a), by striking paragraph (5) 
                and inserting the following:
            ``(5) recommend a program for carrying out the policy 
        declared in section 302 (including a policy to ensure that the 
        justice system remains accessible to small business enterprises 
        for the resolution of disputes with the Federal Government), 
        together with such recommendations for legislation as the 
        President may deem necessary or desirable.'';
                    (B) in subsection (b)--
                            (i) by striking ``(b)'' and inserting 
                        ``(b)(1)''; and
                            (ii) by adding at the end the following:
    ``(2) The President, after consultation with the Chief Counsel for 
Advocacy of the Small Business Administration and the Attorney General, 
shall transmit simultaneously as an appendix to such annual report, a 
report that describes, by agency and department--
            ``(A) the total number of claims filed, processed, settled, 
        and litigated by small business concerns under section 504 of 
        title 5, United States Code, and section 2412 of title 28, 
        United States Code (originally enacted pursuant to the Equal 
        Access to Justice Act (Public Law 96-481; 94 Stat. 2325));
            ``(B) the total dollar amount of all outstanding awards and 
        settlements to small business concerns under such sections;
            ``(C) the total dollar amount of all claims paid to small 
        business concerns under such sections;
            ``(D) the underlying legal claims involved in each 
        controversy with small business concerns under such sections; 
        and
            ``(E) any other relevant information that the President 
        determines may aid Congress in evaluating the impact on small 
        business concerns of such sections.
    ``(3) Each agency shall provide the President with such information 
as is necessary for the President to comply with the requirements of 
this subsection.''; and
                    (C) in subsection (d)--
                            (i) by striking ``(d)'' and inserting 
                        ``(d)(1)''; and
                            (ii) by adding at the end the following:
    ``(2) All reports concerning the Equal Access to Justice Act 
(Public Law 96-481; 94 Stat. 2325), or the congressional policy to 
ensure that the justice system remains accessible to small business 
enterprises for the resolution of disputes with the Federal Government, 
shall be transmitted to the following congressional committees:
            ``(A) The Committee on the Judiciary and the Committee on 
        Small Business of the House of Representatives.
            ``(B) The Committee on the Judiciary and the Committee on 
        Small Business and Entrepreneurship of the Senate.''.

SEC. 4. EQUAL ACCESS FOR SMALL PARTIES IN CIVIL AND ADMINISTRATIVE 
              PROCEEDINGS.

    (a) Elimination of Substantial Justification Standard.--
            (1) Administrative proceedings.--Section 504 of title 5, 
        United States Code, is amended--
                    (A) in subsection (a)(1), by striking ``, unless 
                the adjudicative officer'' and all that follows through 
                the period at the end and inserting a period; and
                    (B) in subsection (a)(2), by striking ``The party 
                shall also allege that the position of the agency was 
                not substantially justified.''.
            (2) Judicial proceedings.--Section 2412 of title 28, United 
        States Code, is amended--
                    (A) in subsection (d)(1)(A), by striking ``, unless 
                the court'' and all that follows through the period at 
                the end and inserting a period;
                    (B) in subsection (d)(1)(B), by striking ``The 
                party shall also allege'' and all that follows through 
                the period at the end and inserting a period; and
                    (C) in subsection (d)(3), by striking ``, unless 
                the court'' and all that follows through the period at 
                the end and inserting a period.
    (b) Eligibility of Small Businesses for Fee Award.--
            (1) Administrative proceedings.--
                    (A) In general.--Section 504(b)(1)(B)(ii) of title 
                5, United States Code, is amended by striking 
                ``$7,000,000'' and inserting ``$10,000,000''.
                    (B) Adjustment in net worth limitation.--Section 
                504(b) of title 5, United States Code, is amended by 
                adding at the end the following:
            ``(3) Beginning on January 1 of the 5th year following the 
        date of enactment of this paragraph, and on January 1 every 5 
        years thereafter, the dollar amount under paragraph (1)(B)(ii) 
        shall be adjusted by the Producer Price Index as determined by 
        the Secretary of the Treasury, in collaboration with the Bureau 
        of Labor Statistics.''.
            (2) Judicial proceedings.--
                    (A) In general.--Section 2412(d)(2)(B)(ii) of title 
                28, United States Code, is amended by striking 
                ``$7,000,000'' and inserting ``$10,000,000''.
                    (B) Adjustment in net worth limitation.--Section 
                2412(d) of title 28, United States Code, is amended by 
                adding at the end the following:
            ``(5) Beginning on January 1 of the 5th year following the 
        date of enactment of this paragraph, and on January 1 every 5 
        years thereafter, the dollar amount under paragraph (2)(B)(ii) 
        shall be adjusted by the Producer Price Index as determined by 
        the Secretary of the Treasury, in collaboration with the Bureau 
        of Labor Statistics.''.
    (c) Elimination of Rate Cap.--
            (1) Administrative proceedings.--Section 504(b)(1)(A) of 
        title 5, United States Code, is amended--
                    (A) by striking ``(i)''; and
                    (B) by striking ``by the agency involved'' and all 
                that follows through ``a higher fee'' and inserting 
                ``by the agency involved''.
            (2) Judicial proceedings.--Section 2412(d)(2)(A) of title 
        28, United States Code, is amended--
                    (A) by striking ``(i)''; and
                    (B) by striking ``by the United States'' and all 
                that follows through ``a higher fee'' and inserting 
                ``by the United States''.
    (d) Offers of Settlement.--
            (1) Administrative proceedings.--Section 504(a) of title 5, 
        United States Code, as amended by this section, is further 
        amended by adding at the end the following:
    ``(5)(A) At any time after an agency receives an application 
submitted under paragraph (2), the agency may serve upon the applicant 
a written offer of settlement of the claims made in the application. If 
within 10 business days after such service the applicant serves written 
notice that the offer is accepted, either the agency or the applicant 
may then file the offer and notice of acceptance together with proof of 
service thereof.
    ``(B) An offer not accepted within the time allowed shall be deemed 
withdrawn. The fact that an offer is made but not accepted shall not 
preclude a subsequent offer. If any award of fees and expenses for the 
merits of the proceeding finally obtained by the applicant is not more 
favorable than the offer, the applicant shall not be entitled to 
receive an award for fees or other expenses incurred (in relation to 
the application for fees and expenses) after the date of the offer.''.
            (2) Judicial proceedings.--Section 2412(d)(1) of title 28, 
        United States Code, as amended by this section, is further 
        amended by adding at the end the following:
    ``(E)(i) At any time after an agency receives an application 
submitted under subparagraph (B), the agency may serve upon the 
applicant a written offer of settlement of the claims made in the 
application. If within 10 business days after such service the 
applicant serves written notice that the offer is accepted, either the 
agency or the applicant may then file the offer and notice of 
acceptance together with proof of service thereof.
    ``(ii) An offer not accepted within the time allowed shall be 
deemed withdrawn. The fact that an offer is made but not accepted shall 
not preclude a subsequent offer. If any award of fees and expenses for 
the merits of the proceeding finally obtained by the applicant is not 
more favorable than the offer, the applicant shall not be entitled to 
receive an award for fees or other expenses incurred (in relation to 
the application for fees and expenses) after the date of the offer.''.
    (e) Declaration of Intent to Seek Fee Award.--
            (1) Administrative proceedings.--Section 504(a)(2) of title 
        5, United States Code, as amended by this section, is further 
        amended by inserting before the first sentence the following: 
        ``At any time after the commencement of an adversary 
        adjudication, the adjudicative officer may (and if requested by 
        a party shall) require a party to declare whether such party 
        intends to seek an award of fees and expenses against the 
        agency should such party prevail.''.
            (2) Judicial proceedings.--Section 2412(d)(1)(B) of title 
        28, United States Code, as amended by this section, is further 
        amended by inserting before the first sentence the following: 
        ``At any time after the commencement of an adversary 
        adjudication, as defined in subsection (b)(1)(C) of section 504 
        of title 5, United States Code, the court may (and if requested 
        by a party shall) require a party to declare whether such party 
        intends to seek an award of fees and expenses against the 
        agency should such party prevail.''.
    (f) Payment of Attorneys' Fees From Agency Appropriations.--
            (1) Administrative proceedings.--Section 504(d) of title 5, 
        United States Code, is amended to read as follows:
    ``(d)(1) Fees and other expenses awarded under this section shall 
be paid by any agency over which the party prevails from any funds made 
available to the agency by appropriation or otherwise.
    ``(2) Fees and expenses awarded under this section may not be paid 
from the claims and judgments account of the Treasury from funds 
appropriated pursuant to section 1304 of title 31.
    ``(3) Paragraph (2) shall not apply to the National Labor Relations 
Board, the Occupational Safety and Health Administration, the Mine 
Safety and Health Administration, or the Equal Employment Opportunity 
Commission.''.
            (2) Judicial proceedings.--Section 2412(d)(4) of title 28, 
        United States Code, is amended to read as follows:
    ``(4)(A) Fees and other expenses awarded under this subsection 
shall be paid by any agency over which the party prevails from any 
funds made available to the agency by appropriation or otherwise.
    ``(B) Fees and expenses awarded under this section may not be paid 
from the claims and judgments account of the Treasury from funds 
appropriated pursuant to section 1304 of title 31.
    ``(C) Subparagraph (B) shall not apply to the National Labor 
Relations Board, the Occupational Safety and Health Administration, the 
Mine Safety and Health Administration, or the Equal Employment 
Opportunity Commission.''.
    (g) Eligibility of Taxpayers for Fee Award.--
            (1) Administrative proceedings.--Section 504 of title 5, 
        United States Code, as amended by this section, is further 
        amended by striking subsection (f).
            (2) Judicial proceedings.--Section 2412 of title 28, United 
        States Code, as amended by this section, is further amended by 
        striking subsection (e) and redesignating subsection (f) as 
        subsection (e).
    (h) Conforming Amendment Relating to Reporting Requirement Under 
Small Business Act.--Section 504(e) of title 5, United States Code, is 
amended to read as follows:
    ``(e)(1) The Attorney General, after consultation with the Chief 
Counsel for Advocacy of the Small Business Administration, shall report 
annually to the Congress on the amount of fees and other expenses 
awarded to individuals during the preceding fiscal year pursuant to 
this section and section 2412 of title 28. The report shall describe 
the number, nature, and amount of the awards, the claims involved in 
the controversy, and any other relevant information which may aid the 
Congress in evaluating the scope and impact of such awards for 
individuals engaged in disputes with Federal agencies. Each agency 
shall provide the Attorney General with such information as is 
necessary for the Attorney General to comply with the requirements of 
this subsection.
    ``(2) A requirement that the President report annually on 
proceedings affecting small business concerns under this section and 
under section 2412 of title 28 is provided in section 303(b) of the 
Small Business Economic Policy Act of 1980 (15 U.S.C. 631b(b)).''.
    (i) Applicability.--The provisions of this section and the 
amendments made by this section shall apply to any proceeding pending 
on, or commenced on or after, the effective date of this Act.

SEC. 5. DEFINITION OF PREVAILING PARTY IN EAJA CASES.

    (a) Title 5.--Section 504(b)(1) of title 5, United States Code, is 
amended by adding at the end the following:
            ``(G) `prevailing party' includes, in addition to a party 
        who prevails through a judicial or administrative judgment or 
        order, a party whose pursuit of a nonfrivolous claim or defense 
        was a catalyst for a voluntary or unilateral change in position 
        by the opposing party that provides any significant part of the 
        relief sought.''.
    (b) Title 28.--Section 2412 of title 28, United States Code, is 
amended--
            (1) in subsection (d)(2)(H), by inserting after ``means'' 
        the following: ``, subject to subsection (g),''; and
            (2) by adding at the end the following:
    ``(g) For the purposes of this section, the term `prevailing party' 
includes, in addition to a party who prevails through a judicial or 
administrative judgment or order, a party whose pursuit of a 
nonfrivolous claim or defense was a catalyst for a voluntary or 
unilateral change in position by the opposing party that provides any 
significant part of the relief sought.''.

SEC. 6. EFFECTIVE DATE.

    The provisions of this Act and the amendments made by this Act 
shall take effect 30 days after the date of the enactment of this Act.
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