F OR P UBLICATION

UNITED STATES COURT OF AP P EALS F OR THE NINTH CIRCUIT

X U E L U ; J I E H A O ,

Plaintiffs-Appellees/ Cross-Appellants,

v

.

U N I T E D S T A T E S O F A M E R I C A , Defendant-Appellant/ Cross-Appellee. Nos. 17-55040 17-55087

D.C. No. 2:01-cv-01758- CB M-EX

OPI NI ON

A ppeal from the United States District Court for the Central District of California Consuelo B

. Marshall, District J udg e, Presiding

A rg ued and Submitted October 9, 2018 Pasadena, California

F iled April 17, 2019

B e fore: Sandra S. I

kuta and J ohn B

. Owens, Circuit J udg es, and Hay

wood S. Gilliam, J r., * District J udg e.

Opinion by J udg e I k

uta

* T h e H o n orab le Hay

w o o d S

. G illiam

, J r., Un ited States District J u d g e f o r th e No rth ern District o f Calif o rn ia, sittin g b y

d esig n atio n

.L U V

. U N I T E D S T A T E S 2

SUMMARY * *

Equal Access to Justice Act / Attorneys’ F ees

The panel vacated the district court’s award of attorney s’ fees under t h e E qual Access to J u stice Act (“EAJ A”), a nd remanded.

The panel held that because the district c ourt d id not have the b enefit of Goodyear Tire & Rubber Co. v

. Haeger
, 137 S. Ct. 1178 ( 2017), when it issu e d a n award of a ttorney s’ fees, it failed to apply the appropriate leg a l f ramework. The panel further held that i t could not determine whether the court’s

error was harmless, and the p a n el v a cated the award a nd remanded to a llow the district court to reconside r i t s f ee award under the G oodyear standard. On remand, Goodyear ’s causation standard requires the d istrict court to identify those

ex p enses that the plaintiffs would not have incurred b u t for the specific conduct that abused the judicial pro c e ss, o r to determine that the g overnment’s conduct so permeated all o r a portion of the suit that “all fees in the litig ation, or a phase of it, meet the applicable test: They would not h av e b e en incurred ex cept for the misconduct.” 137 S. Ct. at 1188.

** T h is su m m ary co n stitu

t es n o p art o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.L U V

. U N I T E D S T A T E S 3

COUNSEL

Karen Schoen (arg

ued) and C h a rles W

. Scarboroug h, Appellate Staff, Civil Division, United States Department o f J ustice, W ashing ton, D.C
., for D efendant-Appellant/CrossAppellee.

V. J ames DeSimone ( argu ed), V. J ames DeSimone L aw, Marina del Ray
, California; Doug las Grant I ng ra h a m , L aw Offices of Doug las G. I n g r aha m , Santa Monica, California; Colleen M. Mullen a nd Michael D. Seplow, Schonbrun Seplow Harris & Hoffman L L P, L os Ang eles, California; for Plaintiffs-Appellees/Cross-Appellants.

OP INION

I KUTA, Circuit J udg e:

The E qual Access t o J ustice Act, 2 8 U.S.C. § 2412(b), waives the g overnment’s s o vereig n immunity for the imposition of attorney s’ fees “to the same e x t e n t that any other party would b e liable under the common law.” The district court e x e rcised its common law authority to award attorney s’ f

ees to the plaintiffs under this section. B ut because the district court did n ot have the benef i t o f Goodyear Tire & Rubber Co. v. Haeger
, 137 S. Ct. 1178 (2017), when it i s s u e d the award, it failed to apply the appropriate leg al framework. B ecause we cannot determine whether the court’s error was h armless, we vacate the award and remand to allow the district court to reconsider i t s f ee award under the G oodyear standard. On remand, Goodyear ’s causation standard requires the district court to identify those

ex p enses that the plaintiffs would not h a ve incurred but forL U V

. U N I T E D S T A T E S 4

the specific cond u c t that abused the judicial process, o r to determine that the g overnment’s misconduct so p e rmeated all

o r a p o rt i on of the suit that “all fees in the litig ation, or a phase of it, meet the applic ab l e t est: They would not have been incurred ex c ept for the misconduct.” 137 S. Ct. at 1188.

I

W e beg in with a brief description of the relevant facts a nd procedural history of this case, which has spanned o v er fourteen y ears and three appeals.

A

Xue L u, a Chinese national, arrived in the United States in 1997 and applied for p ol i t i c a l asy lum. Her asy lum application was assig ned to asy lum o fficer Thomas Powell, who interviewed her with her immig ration attorney on F ebruary 15, 2000. Powell later arrange d an appointment with L u to meet her alone at h er a p artment. At this meeting

, Powell fondled L u and told her that he would a p p r o v e her application only if she accepted his sex ual dema n d s

. L u rejected Powell’s a dvances, and shortly after learned that her
asy lum application had been denied. 1

J ie H ao, a lso a Chines e n ational, arrived in the United States in 1 999 a

nd likewise applied for asy lum. Powell interviewed h er with her a ttorney on May 22, 2000, a nd a few day s later a ttempted to arrang e a meeting alone with H ao in her home. Hao’s attorney , who had a lso represented L u, contacted the Department of J ustice (DOJ ) to r eport Powell’s conduct. Hao met with a DOJ ag ent, and ag reed to c ooperate

1 L u retu rn ed to Ch in a in 2 0 0 9.L U V

. U N I T E D S T A T E S 5

with the g overnment, including by allowing the g overnment to record her meeting w i t h Powell. The ag ent told Hao to sig nal him during the meeting if Powell eng ag ed in improper conduct or attempted to touch her, and the ag e nt w ould protect her.

At the meeting on J une 4, 2000, Powell told Hao that he would approve her asy lum ap p lication for $2,000. At some point in the meeting

, he also slapped Hao’s buttocks multiple times and kissed her on the c heek. The DOJ ag ent did not intervene durin g t h e meeting

. At a follow u p meeting on J une 8, H ao g ave $2,000 (which she had previously received from DOJ ag ents) to Powell. Powell took the money , touched Hao on the knee, asked for a h ug , and ag ain kissed Hao on the cheek.

As a result of this sting operati o n, the U nited States indicted Powell for violating L u’s civil r ig h ts under color of law, in violation of 18 U.S.C. § 242, and for s e eking bribes from both L u a

n d Hao in violation of 18 U.S. C

. § 201(B ) (2)(A). See Xue Lu v

. Powell

, 621 F .3d 944, 946 (9th Cir. 2010). I n 2004, Powell was convicted of both charg es. Id.

B

W h ile the criminal case ag ainst Powell was p endin g , L u and Hao filed a civil action u nder the F ederal Tort Claims A ct (F TCA) a g ainst Powell, his supervisor, various unknown
ag ents, and the United States in connection w ith P o w e ll’s conduct. Their c omplai n t alleg ed: (1) deprivation o f constitutional rig h ts, (2) neg lig ence, (3) sex ual battery

, (4) assault and battery

, (5) intentional infliction of emotional d i stress, ( 6) cruel and inhumane and deg rading treatm e n t ,L U V

. U N I T E D S T A T E S 6

(7) interference with the rig ht to seek asy lum, and (8) g ender discrimination, harassment, and violence ag a inst women. I n 2005, after Powell’s c o n v i ction and sentencing

, the court g ranted the g overnment’s motion to dismiss the action ag ainst the United States for failure t o s tate a c laim, on the g r ound that Powell was acting outside the scope of his empl o y m e nt when he perpetrated the sex u al assaults on the plaintiffs, a nd therefore the United States c o u l d not be held liable o n a respondeat superior theory

. 2

On appeal, we reversed in p art and remanded two c laims for trial. Xue Lu
, 621 F .3d 944, 951. Contrary to the district

c o u r t ’ s determination, we held that Powell a cted w ithin the
scope of his employ

ment because his conduct was “incidental
to the a sy lum sy stem.” I d

. at 949. Nex t, we held that althoug h the U nited States is “ immune from liabilit y f o r an assault or battery by its employ ee,” see 2 8 U.S.C. § 2680(h), L u a nd Hao could bring claims for “infli c t i o n o f emotional distress,” because “[ t] he emotional distress suffered as a result of the d emand for sex ual favors is a n injury d istinct from the battery ,” Xue Lu
, 621 F .3d a t 950. We also held that Powell had attempted to interfere with L u and Hao’s statutory rig ht to asy lum, and therefore they c ould bring claims for interference with t h e i r c ivil rig hts under section 52.1 of the California Civil Code. 3 Id.

2 Hao an d L u ’ s claim s ag ain s t th e in d iv id u al d ef en d an t s w e r e d i s m i s sed th ro u g h a co m b in atio n o f settlem en t an d stip u latio n af t er an ad d itio n al th ree y ears o f

litig atio n

.

3 Sectio n 5 2

. 1 ( c ) o f th e Calif o rn ia C iv il Co d e p ro v i d es th at “ [a]n y in d iv i d u a l w

h ose ex ercise or en

j o y m en t o f rig h ts secu red b y th e Co n stitu tio n or law s o f t

h e U n ited States, o r o f rig h ts secu re d b y t h e Co n stitu tio n o r law s o f t

h is s t a te, h as b een in terf

ered w ith

, or attem

pted
to b e i n terf

ered w ith [in a sp ecif

ied m an n er] m ay

in stitu te an d p ro secu teL U V

. U N I T E D S T A T E S 7

On remand, L u and Hao’s claims for violation of section 52.1 and i n t e n

t i o n a l infliction of emotional distress proceeded
to a bench trial. I n an Aug ust 5, 2 013 order, the district court ruled in favor of the plaintiffs o n b oth claims, reasoning that Powell interfered with the plaintiffs’ rig ht to asy lum or their due process rig ht to a meaning ful hearing for asy lum r e l i ef, and that Powell’s o ffensive touching constitute d intentional inflictio n of emotional distress. T he district court awarded $500,000 in damag e s to L u and $ 700,000 in damag es to Hao.

After the v erdict, the plaintiffs moved for attorney s’ fees. The d istrict court determined it could a ward “attorney fees at market r ates i n cases involving bad faith by the United States” if it “finds that the fees incurred during various phases of liti ga tion are in some way traceable to the [ defendant’s] bad faith.” Xue Lu v. United States
, No. 2:01-cv-1758, 2014 W L 2468826, a t * 1 (C.D. Cal. May 23, 2014) (quoting Brown

v. Sullivan

, 9 16 F .2d 492, 495, 4 97 (9th Cir. 1990))

. B ased

on this standard, the court found that the go vernment’s conduct resulted in two incidents of pre-litig ation bad faith conduct and two incidents of bad faith c o n d u c t during the litig ation.

F irst, the court held the D OJ ag ent’s “fail u re to come to [ H a o’s] a id a fter Powell touched Plaintiff[ ’s] b uttocks” constituted bad faith pre-litig ation conduct. Id. at *3.

Second, the court found that the g overnment had eng ag ed in pre-litig ation bad f

aith conduct by delay

i ng consideration

in h is o r h er o w

n n a m e an d o n h i s or h er ow n b eh alf a civ il actio n f

or d am ag es . . . .”L U V

. U N I T E D S T A T E S 8

of Hao’s asy lum application fo r seven y e ars, until the criminal case ag ainst Powell was resolved. 4 Id.

Third, the court found the g overnment had eng ag ed in b ad faith conduct by arg uing during the litig ation that Hao could
not claim she suffered an injury from Powell’s touching because Hao g ave “ex press, voluntary written consent” to participate in the sting o peration, a nd ha d a s sumed the potential risks associated wi th the o p eration. Id. The court found that H ao had c onsented onl y to assisting in the sting

, not to being a v ictim of offensive touching

, and therefore this
arg ument was in bad faith. Id. at *4.

F inally

, the district c o u r t held that the g overnment h ad
eng ag ed in bad faith conduct b y ar gu i n g t hat Hao and L u’s claims were barred by the intentional tort ex ception under the F TCA 5 even thoug h we had previously held on appeal that L u and Hao could bring claims for inten t i onal infliction o f emotional distress. Id.

The district court did n ot, however, a gr ee that all of the conduct identified by L u a nd H a o b e fore or during the lit i ga t i on constituted bad faith. F or instance, the
g overnment’s r eliance o n a n immig ration judg e’s finding s did
not constitute bad faith

. Nor did the g o vernment e ng ag e in bad faith c onduct by m a k i n g a reference to L u and Hao’s claims as “mere alleg ations” during the proceeding s. Id. at *4 n.1.

4 Hao ’ s asy lu m

ap plicatio n

w as g ran t ed in 2 0 0 7

.

5 T h e FT CA ex clu d es an y claim “ arisin g o u t o f ” elev en categ o ries of
to rts, in clu d in g assau lt o r b attery , b u t n o t in clu d in g in ten tio n al in f lictio n

o f em o tio n al d istress. 2 8 U.S.C. § 2 6 8 0 (h ).L U V

. U N I T E D S T A T E S 9

T h e district court concluded that “[ u] nder the totality o f the circumstances” the g overnment’s bad faith “has affected all portions or phases of the litig ation since J une 8, 2000,” the da t e o f t h e sting operation. Id. a t * 4. The district court t h e refore held that the plaintiffs were entitled to s o m e $877,563 in fees under 28 U.S.C. § 2 412(b). I t a lso awarded $4,112 in fees under 2 8 U.S.C. § 2412(d), which provides for the award of fees to a prevailing party under specified circumstances, 6 for fees incurred prior to the sting operation. See id. at *5. I n total, the district court a warded $881,675 in fees. Id. at *8.

C

On appeal, we affirmed the district court’s judg ment in an unpublished decision, but v acated the fee award. See Xue Lu

v. United States
, 638 F

. A pp’x 614 (9th Cir. 2016). I n considerin g t h e district court’s r u ling on attorney s’ fees, we upheld three of the dis t rict court’s bad faith finding s. F irst,

we held that the district court had not c learly erred in holding that the g o vernment eng a g ed in bad faith conduct when the DOJ ag e nt failed to come to Hao’s aid, al t h o u g h “ we mig ht

6 2 8 U.S.C. § 2 4 1 2 (d )(1 )(A ) p ro v id es:

Ex cep t as o th erw ise sp ecif i cally p ro v id ed b y s tatu te, a

co u rt sh all aw ard to a p rev ailin g p arty o t he r th an th e Un i ted S t a t e s f

ees an d o th er ex p en ses, in ad d itio n to

an y co sts aw ard ed p u

rsu an t to su

bsectio n (a), in cu rred b y th at p arty in a n y c i v il actio n (o th er t h an cases

so u n d in g in to rt), in clu d in g p r oceed in g s f o r j u d icial

r ev i ew of ag en cy actio n , bro u g h t b y o r ag ain s t th e Un i ted States in an y c ou rt h av i n g j u risd ictio n o f th at actio n , u n less t

h e co u rt f

in d s th at th e p o sitio n o f th e Un i ted States w as su

b stan tially j u stif

i ed o r th at sp ecial circu m s tan ces m ak e an aw ard u n j u st.L U V

. U N I T E D S T A T E S 10

well have come to a different conclusion on de novo review.” Id. at 618–19. Nor did the district court clearly err in finding the g overnment’s delay in considering Hao’s asy lum application w a s bad faith c o nduct, at least for the first five
y e a rs. Id. at 6 19 n.2. W e h eld that the final two y ears o f delay (from 2005 to 2007), which “occurred in the o r dinary course of processing ” Hao’s asy lum application, d id not r ise
to the level of bad faith. Id. at 6 19 n.2. L ikewise, the district
court did not c l e a r ly err in holding the g overnment eng ag ed in bad faith b y arg uing that H a o h a d consented o r assumed the risk of Powell’s sex ual touching , althoug h we noted that a finding of bad faith was not compelled. Id. at 618.

W e reversed, however, the district court’s fourth finding “that the g overnment arg ued in bad f aith that the intentional
tort ex ception barred Plaint i f fs ’ claims in spite o f our first opinion.” Id. W e noted that “[ w ] h enever the g overnment presented an intentional tort ex cept i o n-based theory

, it provided a non-frivolous way to reconcile the arg ument with

our previous decision.” Id. W e c oncluded t h a t “[ b] ad faith has a h ig h threshold and the district c o urt’s finding of it here is without support in the record. ” I d

. W e therefore vacated the fee award and remanded “to allow the district court to decide what, if any , c hang e s should be made to the award of fees incurred after J

une 8, 2000.” Id. at 619. 7

D

O n r e mand, the district court ag ain a rticulated its understanding that it “may award attorney fees a t market rates

7 We also v acated t

h e d istrict co u rt’ s f

ee aw ard t o th e ex ten t it relied

o n 28 U.S.C. § 2 4 1 2(d )(2 )(A ), becau se th at sectio n d o es n o t ap ply to to rt actio n s lik e th is o n e. Id

.L U V

. U N I T E D S T A T E S 11

for the entire course of litig ation, including time spent preparing

, defending

, and appealing

. . . awards of attorney s’ fees, if it finds that the fees incurred during various p hases o f litig ation are in some way traceable to the [ defendant’s] b ad faith.” Xue Lu v. United States
, N o. 2:01-cv-1758, 2016 W L 11087106, at *2 (C.D. Cal. Nov. 10, 2016) (quoting Brown
, 916 F .2d at 495, 49 7 ) (alterations and emphasis in district
court order). B ecause we had rejected the conclusion that the
g overnment’s intentional tort arg ument constituted bad faith

c o nduct, the court set out to calculate which f ees we r e “traceable to the three finding s of bad f aith aff i r m e d b y the Ninth Circuit,” namely the DOJ a gent’s failure to come to Hao’s aid, the g overnment’s delay in considering Hao’s
asy lum application, and the g overnment’s arg ument that Hao had consented o r as s u m e d the risk of Powell’s sex ual touching

. Id.

To trace t h e s e fees, the d istrict court relied on a declaration submitted by plaintiffs’ counsel, which provided
two alternatives for calculating attorney s’ fees. I d. Fi r s t, counsel arg ued that “all work performed in this case is traceable to Powell’s b ad faith” and s o a l l fees should be awarded. A s an alternative, however, counsel trace d t h e hours incurred by each attorney o r staff me mber to one o r

more of the distr i c t c o u rt’s three surviving finding s of b ad faith. T he plaintiffs took a broad v iew of traceability

. F o r instance, the decl ar a t i o n claimed that two incidents o f b ad faith conduct—the DOJ ag ent’s f ailure to assist Hao a fter Powell touched her, and the government’s d elay in considera t i o n o f H a o ’ s a s y

l u m a p p l i cation—“ex isted from the inception of the litig ation so the majority of Plaintiffs’ counsels’ work w as in some w a y t raceable to that bad faith conduct.” Fu rther, the declaration claimed that the
g overnment’s arg ument about the F TCA’s ex ception forL U V

. U N I T E D S T A T E S 12

intentional torts related to Powell’s offensive touching

, a n d therefore work addressing the inte ntional tort arg ument was also traceable to bad f

a ith. F inally

, the declaration claimed that because work for both Hao a n d L u substantially overlapped, o nly work performed so lely for L u w as not recoverable. B ased on this analy sis, the d e c laration concluded that the work traceable to bad faith amou n t e d t o $676,751 in f

ees, see id.

, some $200,000 less than the amount the distr i c t c ourt had previously awarded f or the entire litig ation.

Wi t h o u t u ndertaking any independent analy sis, t h e d i s t r i c t court adopted the dec laration, and concluded that “[ t] he evidence submitted by Plaintiffs d e monstrates $676,751 in fees ex pended in the underly ing action is traceable to one or

more of the three finding s of bad faith by the Gove r n m e n t , ” and awarded the entire amount to plaintiffs. Id. at *2, *4.

Plaintiffs a lso moved f

or attorney s’ fees incurred on the appeal of the previous f

ee award and post-remand. Althoug h this f ee motion w a s n ot timely under Ninth Circuit Rule 3 9-1.6, the district court h e l d that the untimely filing

was a r esult of ex c usable neg lect u n d e r Pincay v. Andrews

, 389 F .3d 853 (9th Cir. 2004 ) ( e n b a n c). The district court gr a nted the motion in full, holding that “[ t] he evidence submitted b y p l a intiffs demonstrates $314,651 in fees

ex p ended on the second appeal and post-remand is traceable
to one or m o re of the three finding s of bad faith by the Government.” Xue Lu
, 2016 W L 1108716, at *4. I n total, the
court a warded $993,758 in attorney s’ fees. The g overnment appealed.L U V

. U N I T E D S T A T E S 13

I I

After the d istrict court ruled, the Supreme Court issued its opinion in Goodyear Tire & Rubber Co. v. Haeger
, 137 S. Ct. 1 1 78 ( 2017). Goodyear shed a new lig ht on the framew o r k for awarding attorney s ’ f ees a s sanctions, w hich is equally applicable to an aw a r d o f fees under § 2412(b). Therefore,

we beg in by ex plaining this framework in lig ht of Goodyear.

A

I n Goodyear

, three plaintiffs claimed that the failure of a Goody ear tire caused their motorhome to drive o ff the road and flip over. 137 S. Ct. at 1184. D uring d i s co v e r y , the plaintiffs repeatedly a sked Goody ear to provide internal test results for the tire, but Goody ear d elay ed its resp onses o r refused to turn over requested documents. Id. The plaintiffs f inally settled with Goody ear before trial. Months after the settlement, the plaintiffs learned that Goody ear had withheld

a crucial set of test re sults for the tires. Id. The plaintiffs then moved the district court for an a w ard of attorney s’ fees and costs as sanctions f

or discovery f

r a ud. Id. The district
court f o u n d that G oody ear “had eng ag ed in a ‘y e ars-long course’ of b ad

- faith behavior,” making “ repeated a nd delibera t e attempts to frustrate the resolution of this case on the merits.” Id. The court therefore ordered Goody ear to reimburse the plai n tiffs for attorney s’ fees and costs p aid during the suit

, reasoning that d u e to Goody ear’s eg reg ious behavior, “ all of the a ttorney s’ fees incurred in the case [ c an] be awarded without any need to find a causal link b e tween [ those ex penses and] the sanctionable conduct.” Id. a t 1185 (internal quotation marks omitted). We upheld this award on appeal. Id. The Supreme Court reversed, holding that theL U V

. U N I T E D S T A T E S 14

award was inconsisten t wi th the proper framework for imposing such sanctions.

B

I n ex plaining the proper framework, Goodye a r b eg an with first principles: that “[ f] ederal courts p o s s e ss c ertain ‘inher e n t powers,’ not conferred by rule or statute, ‘ to manag e their own affairs so a s t o achieve the orderly a nd

ex p editious disposition of cases.’” Id. at 1186 (quoting Link

v. W a bash R. Co.
, 370 U.S. 626, 630–31 (1962)). I ndeed, the Supr e m e Court has long made clear that “[ c] ourts of justice

are universally ackno wl e d g ed to be vested, by their very creation, with power to impose silence, respect, and decorum, in thei r presence, and submission to their lawful mandates.” Chambers v. NASCO, I

nc. , 5 01 U .S. 32, 43 (1991) (quoting Anderson v. D unn , 6 Wheat 204, 227 ( 1821)). Among the inherent powers recog niz e d b y the Suprem e C o urt is the
power “to fashion an appropriate sanction for conduct which abuses the judicial process.” G oodyear

, 1 3 7 S. Ct. at 1186 (quoting Chambers

, 501 U.S. at 44–45). Such a sanction may include the assessment of attorney s’ fees ag ainst “a party that has acted in bad faith.” I d. ; see a l s o Chambers

, 501 U.S.
at 4 5–46 ( “[ A] court may assess a ttorney ’s fees w hen a party has ‘acted in b ad faith, v ex a tiousl y , w antonly

, or for oppressive reasons.’”). 8

Goodyear emphasiz ed that a ba d faith fee award, “when imposed pursuant to civil p rocedures, must be c ompensatory rather th a n p u n i t ive in n ature.” 1 37 S. Ct. at 1186 (citing

8 Su ch f ee aw ard s are an ex cep tio n to “ t h e so

- called ‘ A m e r i c a n Ru le,’ ” w h ich “ p ro h ib its f

ee sh if tin g i n m ost cases.” Ch a m b ers , 5 0 1 U .S. at 4 5

.L U V

. U N I T E D S T A T E S 15

Mine W o rkers v. Bagwell

, 512 U.S. 821, 826–30 (1994)). “I n other w ords, the fee award may g o no further than to redress the w rong ed party ‘for losses sustained’; it may not impose an additional amount as punishment for the sanctioned par ty ’s misbehavior.” Id. ( quoting Bagwell

, 512 U.S. at 829). I f a fee award g o e s bey ond a compensatory purpose, “a court would need to provide p roc e dural g uarantees applicable in criminal c ases, such as a ‘bey ond a reasonable d oubt’ standard of proof.” Id. ; see also Miller v. City of Los Angeles

, 661 F .3d 1024, 1030 (9th Cir. 2011) (n oting that “noncompensatory sanctions” may be “akin to criminal contempt and may be imposed only by followi n g the procedures applicable to c riminal cases, in c l uding appointment of an independent prosecutor, proof bey ond a reasonable doubt a nd a jury trial”).

B e cause the imposition of attorney s’ fees ag ainst a party who abused the judicial process is limit e d t o compensation for the wrong ed party , “the c ourt can shift o nl y those attorney ’s f

ees incurred because of the misconduct at issue.” Goodyea r , 1 3 7 S. Ct. at 1186. “[ A] sanction counts a s compensatory only if it is calibrated to the damag es caused b y the bad faith acts on which i t i s b a sed.” Id. (cleaned u p). Therefore, the court must “establi s h a causal link—between the litig ant’s misbehavior and leg al fees paid by the opposing party .” Id. ; see also Miller

, 6 6 1 F .3d at 1029. Goodyear rejected our determination that “the trial court could g rant all attorney ’s fees incurred during the time when [ G oody ear was] acting in bad faith.” Id. at 1189 (emphasis and i n t e rn al quotation marks omitted). According to the Court, “that is a temporal limitation, not a causal one,” and the r efore “it is wide of the mark.” Id. I n s t ead, “[ a] sanctioning court must determine which f

ees were incurred because of, and s o l el yL U V

. U N I T E D S T A T E S 16

because of, the misconduct a t issue (howe v er serious, o r concurrent with a lawy

er’s work, it mig ht have been).” Id.

Goodyear framed this causal link “as a but-for tes t ”: a party “ may recover ‘only the portion of h is fees that he would
not have paid but for’ the misconduct.” Id. at 1187 (quoting Fox v. Vice
, 563 U.S. 826, 836 (2011)). I f an ex pense would have b e en i ncurred e v en absent any bad faith conduct, it
cannot be part of a bad faith fee award. Id. A court may not shift f ees if “the same work would h a v e b e e n done (for

ex ample, the same d eposition taken) to c ontest the non

frivolous claims in the s u i t

. ” Id. I n other words, a district
court making a bad faith fee award must determine “whether

a g iven leg a l f

e e

— s ay , for taking a deposition or drafting a motion—would or would n o t have been incurred in the ab s e n c e of the sanctioned conduct.” Id. Thus, a court must g enerally eng ag e in “the g r ind o f s eg reg ating individual

ex p ense items ( a deposition here, a motion th e r e ) ” o r “categ ories of such items ( ag a in, like ex pert d iscovery )” in order to determine which fees “would not have been incurred

ex c e pt for the misconduct.” Id. at 1188.

I n certain ex ceptional c ases, the but-for test allows a court to “shift a ll of a p a rt y ’s fees, from either the start or some mi d point of a suit, in o ne fell swoop.” Id. at 1187. According to the Court, Chambers offered “one illustration” of this situation where “literally every thing the defendant did—‘his entire course of conduct throug hout,’ a n d i ndeed preceding

, the litig ation—was ‘ p a r t of a sordid scheme’ to defeat a valid claim.” Id

. at 1 187–88 (quoting C h a mbers

,L U V

. U N I T E D S T A T E S 17

501 U .S. at 51, 57). 9 U nder these circumstances, “the district
court could reasonably conclude that all leg al ex penses in the suit ‘were caused . . . solely b y [ his] fraudulent and braz enly unethical efforts.’” Id. at 1188 (quoting Chambers

, 501 U.S.
at 58). Similarly

, “ [i] f a plaintiff initiates a case in complete bad faith, so that every cost of defense is attributable only to sanctioned behavior, the c o u rt may aga i n m ake a b lanket award.” I

d. This “ex ceptional case” rule is consistent with

our p rior cases holding that where the entirety of the a ction is attributable to bad f

aith abuse o f the judicial p r o c e s s , a di s trict c ourt can award fees “for the entire course o f litig ation,” so long as all fees are “ in some way traceable to” bad faith activity

. Brown , 916 F .2d at 497.

I n shor t , Goodyear clarified that when a warding attorney s’ fees as a sanction for bad f aith c o n d u c t , a district
court must identify the conduct t h a t abused the judicial
process a nd, a pply ing Goodyear ’s but-for stan d a rd

, identify only those ex penses that the wrong ed p a r t y would n o t have

9 In Ch a mb ers , th e d irecto r o f a telev isio n

statio n h ad en tered in to a

co n tract to sell th e statio n ’ s f acilities an d licen se to NA SCO, an d th en ch an g ed h is m in d

. 50 1 U.S. at 3 5

– 3 6

. W h en NA SCO f iled a law su i t, th e d irecto r em

b ark ed o n a sch em e to p rev en t NA SCO f ro m u sin g t

h e co u rt to en f o rce th e co n tract. Id

. at 3 6– 3 7

. In h is i n itial c o n fe r e n c e w ith th e d istrict co u rt, t

h e d ire c t o r d elib erately co n cealed th e f act th at h e w as tak i n g step s to tran sf

er th e statio n to a th ird p a r t y fo r th e p u rp o se of

ev ad in g th e co u

rt’ s reach

. Id

. at 3 7– 3 8

. T h e d irecto r “ co n tin u ed t o ab u s e th e j u d icial p ro cess”; h e ref u sed to p ro v id e essen tial d isco v ery m aterials,

m ad e “ a series o f m eritless m o tio n s an d plead i n g s an d d elay in g actio n s,”

an d s ecretly so u g h t p erm i ssio n f ro m th e ap p licab le reg u lato ry ag en cy to relo cate th e statio n ’ s o p eratio n s. Id

. at 3 8 –3 9 (in tern al q u o tatio n m ark s

o m itted ). T h e d i s trict co u rt f o u n d th at th e d ef

en d an t d elib erately m isu s ed th e j u d icial p ro cess “ t o d ef eat NA SCO’ s claim b y h arassm en t, rep eated

an d en d less d elay

, m o u n

t ain o u s ex pen se an d w aste o f f i n an cial reso u

rces.” Id

. at 5 7

.L U V

. U N I T E D S T A T E S 18

incurred but for the misconduct. S ee 137 S. Ct. a t 1187. B ecause the f

ee award must be compensatory , rather than
p u nitive, the a

ward “may g o no further than to redress t h e wrong ed party for losses sus t a ined.” I d. at 1186 (internal quotation marks omitted)

. I n an ex ceptional case such a s Chambers

, w here fees associated w i t h the e ntirety o f an action, or an entire portion o f the action, would not have been incurred but for the bad faith conduct o f a litig ant, the district
court may shift “all of a p ar t y ’ s fees, from e ither the start o r some midpoint of a suit, in one fell swoop.” I d. at 1187.

C

Goodyear ’ s framework is applicable in our case. I n Goodyear

, the Court reaffirmed tha t c o u rts have inherent,

common law authority to assess a ttorney s’ fees as a sanction for bad faith c onduct. A court w o u l d b e precluded from

a s s essing attorney s’ fees ag ainst the U nited States unless it

w a ived its sovereig n immunity

. A ccording ly

, the EAJ A provided such a waiver for attorney s’ f e e s awards in civil

cases in w hich the United States is a p arty

. 1 0 Under the

10 T h e relev an t sectio n

p ro v id es:

Un l ess ex pressly p ro h ib i ted b y s tatu te, a co u rt m ay

aw ard reaso n ab le f

ees an d ex p en ses o f atto r n ey s, in ad ditio n to th e co sts w

h ich m ay b e aw ard ed p u rsu an t to

su bsectio n (a), to th e p rev ailin g p arty in an y civ il actio n b ro u g h t b y o r ag ain st th e Un ited S tates o r an y ag e nc y

o r an y o f f icial o f th e Un i ted States actin g in h is o r h er

o f f icial cap acity in an y co u rt h av in g j u risd ictio n o f su ch actio n

. T h e Un i t ed S t ates s h all b e liab le f o r su ch f ees

an d ex p en ses to th e sam e ex ten t th at an y oth er p arty

w o u ld b e liab le u n d er th e co m m o n law o r u n d er t h e term s o f an y statu te w

h ich sp ecif

ic a l l y p ro v id es f

or

su ch an aw ard

.L U V

. U N I T E D S T A T E S 19

EAJ A, “ [ u] n less ex pressly prohibited by statute, a c ourt may award reason a b l e fees and ex p enses of attorney s

. . . to the prevailing party in any civil a c tion broug ht by or ag ainst the Un i t e d S t a tes

. . . . ” 28 U.S.C. § 2412(b). I n such cases, “[ t] he United States shall be liable for such fees and ex penses to the same ex tent that a

n y other party would b e liable u nder the common law o r under the terms of any statute which specif i c a l ly provides for such an award.” Id. (emphasis added).

W e h ave interpreted the statut e ’ s reference to the common law as including the common law authority of courts to assess attorney s’ fees pursuant to their inherent powers. See Barry

v. Bowen
, 825 F .2d 1324, 1334 ( 9th Cir. 1987), overruled on other grounds as recognized in Mt. Graham Red Squirrel v

. Madigan

, 9 54 F .2d 1 441, 1 4 62 ( 9th C i r

. 1992). Said otherwise, “[ s] ection 2 412(b) codified the bad faith ex c eption
to the ‘American rule’ ag a inst the award of a t t orney ’s fees and made that ex ception applicable in suits ag ainst the United States.” Id. B ecause the ability of a c o u rt to a ward attorney s’ fees ag ainst the g overnment for bad f aith conduct is the same as the court’s inherent power to do so ag ainst other litig a nts, absent another statute that confers additional powers, any analy sis of the bad faith ex ception u nder t h e E AJ A “draws upon the well of cases decided in other contex ts.” Id. 1 1

2 8 U.S.C. § 2 4 1 2 (b ).

11 T h e in q u iry u n d er 2 8 U.S.C. § 2 4 1 2 (b ) d if f ers f ro m th at u n d ertak en b y co u rts d ec id in g w h eth er t o aw ard f

ees u n d er 2 8 U.S.C. § 2 4 1 2 (d ) ( 1 ) (A ), w

h i ch allo w s a co u

rt to sh i f t all f ees an d ex p en ses in cu rred b y a p rev ailin g p arty (o th er th an

th e U n ited States) in an actio n b r o u g h t b y o r ag ain st th e Un i ted States, u n less th e co u rt d eterm in es th at th e p ositio n of t h e Un ited States in th e litig atio n w as “ su b stan tially j u stif i ed .” 2 8 U.S.C. § 24 1 2(d )(1 )(A ); see a lso INS v. Jea n , 4 9 6 U.S. 1 5 4
,L U V

. U N I T E D S T A T E S 20

I I I

W e now consider what Goodyear means for this case. A s in Goodyear itself, we must consider whether the district court’s ruling complied wit h the Goodyear f ramework, o r otherwise p asses a but-for test. W e review the district court’s fee award for a

buse o f discretion. See Rodriguez v. United States
, 542 F .3d 704, 709 (9th Cir. 2008). And “in lig ht o f the trial court’s superio r understanding of the litig ation,” its judg ment is “entitled to substantial deference o n a ppeal.” Goodyear

, 137 S. Ct. a t 1187 (internal quotat ion marks omitted).

B e cause the district court d id not have the benefit o f Goodyear when it issued its ruling

, it is not surprising that the

co u r t ’ s fee a

ward does not comply with Goodyear ’s framework. There are several inconsisten c i e s

. F irst, the district court did not ex pressly a ppl y G oodyear ’s but-for standard o r undertake the g ranular inquiry indi c ated by that

o p i n ion, i.e., seg r eg a ting individual ex pense items or categ ories of such items and e stablishing that they would not have been incurred ex cept for the g overnment’s misconduct. Rather, the court relied o n t he plaintiffs’ declaration, which provided only broad g eneraliz a tions about causation, and did
not calibrat e a c l o se “causal link,” id. a t 1186, between the sanctionable conduct an d specific leg al tasks. F urther, in indicating that the m a jority of plaintiffs’ fees were recoverable merely because th e g overnment’s bad faith

1 5 8

– 6 0 (1 9 9 0). A co u rt’ s d et e r m i n a tio n w h eth er t h e g o v ern m en t’ s p o sitio n w as su

b stan tially j u s tif

ied is m ad e f

o r a p articu lar actio n as a

w h o le. S

ee Jea n , 4 9 6 U.S. at 1 6 1

– 6 2

. Sectio n 2 4 1 2 (d )(1 )(A ) is n o t ap p licab le h ere b ecau se th e p lain tif f s’ claim s “ so u n d [] in to rt.” 2 8 U.S.C. § 2 4 1 2(d )(1 )(A ).L U V

. U N I T E D S T A T E S 21

conduct “ex isted from the inception o f t h e litig ation,” the declaration appeared to adopt the temporal approach rejected in Goodyear. Moreover, the declaration encompa s s e d fees for w ork d one for both Ha o a n d L u, contrary to Goodyear ’s clarification that it is inappropriate to g rant fees “for all leg al work relating to” specified claims “reg ardless o f whether the

s a m e work would have been done (for ex ample, the sam e depositions taken) to contest the non-frivolous claims in the suit.” I d

. at 1187.

Al t h oug h the d istrict c ourt failed to provide the close analy sis g enerally required b y Goodyear

, we must still consider whe t h e r this is one of the “ex ceptional cases” identified in G oodyear where the “g rind” of tracing e ach leg al f ee to a specific bad faith act i s n o t r e quired. Id. at 1187–88. The court did not make any finding to that effect, but certain of the district court’s statements sug g e st that it deemed the case to be one where the g overnment’s misconduct w as such that it w as appropriate to shift a l l o r a portion of the plaintiffs’ fees “ in one fell swoop.” Id. at 1187. F irst, in stating that under the “totality o f the circumstances” the g overnment’s bad faith “has a ffected all por t i o ns o r phases o f the litig ation s ince J une 8, 2000,” the date of the sting o p eration, the distric t court sug g ested that the
g overnment’s bad faith conduct “so permeated the suit as to make t h a t misconduct a but-for cause of every subsequent leg al e x pense,” id. at 1189. Second, the district court held it could award attorney s fees “if it finds that t h e f ees incurred during various phases of litig ation are in some way traceable
to the [ defendant’s] b ad f aith,” Xue Lu
, 2016 W L 11087106,
at *2 (quoting Brown
, 916 F .2d at 497) (alteration a nd

e m phasis in district court order), a standard that m ay b e applicable in ex ceptional cases, see Brown , 916 F .2d at 497. F inally

, t h e district court’s bad faith finding s included theL U V

. U N I T E D S T A T E S 22

g overnment’s prelitig ation c onduct ( i.e., the failure to co m e to Hao’s aid d u r ing the sting and five of the seven y ears o f delay in processing Hao’s asy lum applicatio n ), which Goodyear indicated is a cons i deration in ex ceptional cases,

see 137 S. Ct. at 1187–88 (stating it had approved the award in Chambers because “ literally every thing the defendant did—‘his entire course of c o n d u ct’ throug hout, and indeed preceding , the litig ation—was ‘part of a sordid scheme’”).

On the o ther hand, there are several indications t h at this

case is not such an ex ceptional case. Our prior opinion makes clear that not all o f the g overnment’s activity is part of a

“ s ordid scheme.” W e concluded that the g overnmen t ’s
arg ument that the F TCA’s intentional torts ex ception barred plaintiffs’ claims d i d n o t c o nstitute bad faith, and that the district court ’ s c o n trary finding was “without support in the record.” Xue Lu
, 638 F

. App’x at 618. W e also held that the final two y ears of delay in processing Hao’s asy lum application “occurred in the ordinary course” and did not r ise
to the level of bad faith. Id. at 619 n.2. N othing in the record
sug g ests that the g o vernment eng ag ed in needless delay of the litig ation, attempted to h arass the plaintiffs with unwarranted depositions or discovery , defied the letter or spirit of a court order, o r otherwise attempted to hamper the judicial process. Cf. Chambers

, 5 01 U.S. at 37–42. Moreover, the district
court itself chose to ig nore the declaration’s assertion that all work p erformed in the case was traceable to the g overnment’s bad faith, and ultimately declined to a w ard some $200,000 in attorney s’ fees. Such a ruling would be inconsistent wit h a conclusion that the g overnment’s misconduct “so infected the lawsuit as to account for each and ever y e x pense the [ plaintiffs] subsequently i n c urred.” G oodyear

, 137 S. Ct. at 1188.L U V

. U N I T E D S T A T E S 23

W e therefore conclude that, as in Goodyea r , there is too much uncertainty reg arding the record and the district court’s reasoning to determine whether the district court’s fee award i s consistent with the G oodyear standard. Our uncerta i n t y “points toward demanding a d o

- o ver, under the unequivocally rig ht leg al rules.” Id. at 1190.

W e rea ch the same conclusion with respect to the
g overnment’s challeng e to the distric t c o u rt’s award o f fees incurred by p laintiffs during the previous appeal of the initial fee award a

nd after r emand. I n g eneral, the Su p r eme Court has r e j e c t ed the arg ument that costs incurred appealing the

a w a r d of a sanction or defending ag ainst such an appeal a re incurred “be c a u s e of” the sanctioned party ’s bad faith conduct in the trial c o u r t

. See Lockary v. Kayfetz

, 974 F .2d 1166, 1177–78 (9th Cir. 19 9 2) (citing Cooter & Gell v

. Hartmarx Corp.
, 496 U.S. 384, 4 06 (1990)). As ex plained in the contex t of Rule 11 sanctions, the ex p e n s e s incurred in defending a sanctions award o n appeal “ a r e directly c aused by the district court’s sanction and the appeal of that sanction,

n ot by the plaintiff’s” bad faith c onduct in the district c ou r t

. Cooter & Gell

, 496 U.S. at 407. T hu s , if the appeal itself is
not frivolous, then a fee a w a rd is g enerally not appropriate. S e e id. This conclusion is consistent with the Goodye a r standard

, w h i c h r e q

uires a direct, but-for relationship b etween the bad f ait h c o n duct and the fees. Nevertheless, there may be ex c eptional cases where brin g i n g o r defending an appeal is part of a sing le “sordid scheme” an d is likewise compensable. The d istrict court may also recons i d e r this issue under the correct standard on remand. 1 2

12 T h e g o v ern m en t arg u es th at th e d istrict co u rt ab u s ed its d iscretio n in co n sid erin g t

h e u n tim ely m o tio n f

or ap p eal f

ees u n d er th e d octrin e of

ex cu sab le n eg l ect b ecau se i t did n o t g iv e th e g ov ern m en t leav e to f i l e aL U V

. U N I T E D S T A T E S 24

W e conclude that it is most p rudent to vacate the f e e award and remand to the d istrict court to determine, under the standar d set out in Goodyear and this opinion. The district
court must identify the a buse of judicial process that is sanctionable, and apply t h e b ut-for standard to determine which fees would not have been incurred but for that conduct. See G o odyear

, 137 S. Ct. at 1 187. I f the district court determines that this is an ex ceptional cas e , i t must e x plain why the entirety o f the c a se, o r some portion of the case, was initiated in “ complete b ad faith,” so that the court may appropriately make a blanket award. 1 3

VACATED AND REMANDED. 1 4

su r- rep ly resp o n d in g to p lain tif f s ’ ex cu sab le n eg lect arg u m en t. W e rej ect th is arg u m en t, an d af

f i rm t h e d istrict co u

rt’ s ru lin g , b ecau s e th e g o v ern m en t can n o t s h o w th at it w as p rej u d iced ; th e ev i d en ce i t so u g h t to p ro v id e in its su

r- rep l y w as alread y b ef

o r e th e d istrict co u rt, an d th e g o v ern m en t h ad th e o p p o rtu n i ty to p resen t its arg u m en t o rally at a h earin g

. T h e g o v ern m en t also arg u es th at th e p lain tif f s erred b y f

ilin g th eir req u est in d istrict co u

rt, in stead of in th e Nin th Circu i t. B ecau se th e g o v ern m en t d id n o t r a ise th is arg u m en t to th e d istrict co u rt, it is w aiv ed

. S ee Exxo n S h ip p in g Co . v. Ba ker , 5 5 4 U.S. 4 7 1 , 4 8 7 (2 0 0 8 ).

13 W e rej ect t

h e p l ain tif

f s’ arg u m en t o n

cro ss- ap peal th at th e d istrict

co u rt erred in d eclin in g to aw ard atto rn ey s’ f ees f o r P o w ell’ s co n du ct. A b ad f aith f ee aw ard is n ot a rem ed y f o r th e co n d u ct g iv in g rise to th e cau s e

o f actio n , see Ch a mb ers , 5 0 1 U.S. at 5 3 , an d th eref o re can n o t

b e “ b ased

so lely u p o n a f in din g o f bad f

aith i n t h e co n d u ct u n d erly in g th e l aw su it,” Ro d rig u ez , 9 7 6 F.2 d at 7 1 2 (em p h asis an d in tern al q u o t a t i o n m ark s

o m itte d )

. T h e d istrict co u rt m ay co n sid er su ch p relitig atio n co n d u ct, h o w ev er, if raised as ev id en ce th at t h e g o v ern m en t’ s co n d u ct bef o re th e

co u rt w as in

b ad f aith o r v ex atio u s. S

ee id

.

14 T h e p arties sh all b ear th eir o w n co sts o n ap p eal.