Source: https://law.justia.com/cases/federal/appellate-courts/cadc/99-5115/99-5115a-2011-03-24.html
Timestamp: 2019-04-24 08:31:17+00:00

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Justia › US Law › Case Law › Federal Courts › Courts of Appeals › D.C. Circuit › 2000 › Halverson, Paul D., et al v. Slater, Rodney E.
John Longstreth argued the cause for appellants. With him on the briefs were Donald A. Kaplan and Mark Ruge.
Rudolph Contreras, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Wilma A. Lewis, U.S. Attorney, R. Craig Lawrence, Assistant U.S.
Attorney, and Dale C. Andrews, Deputy Assistant General Counsel for Litigation, U.S. Department of Transportation.
Tatel, Circuit Judge: After a previous panel of this court invalidated a final rule issued by the Department of Trans- portation, the prevailing parties, appellants herein, filed an application for attorneys' fees and costs pursuant to the Equal Access to Justice Act. The district court denied the application, finding the Department's defense of the rule, though unsuccessful, "substantially justified" within the meaning of the Act. Because the district court failed ade- quately to explain its decision, and because we find unpersua- sive the Department's argument that its position was substan- tially justified, we grant appellants' application for fees and expenses and remand for the district court to calculate the precise amount due.
The Great Lakes Pilotage Act of 1960, 46 U.S.C. ss 9301 et seq., requires that foreign ships traveling the Great Lakes take on an experienced American or Canadian pilot. Id. s 9302(a). The Act directs the Secretary of Transportation to set standards for pilot qualifications, selection, registration, training, and working conditions. Id. s 9303.
Duties; Transfer of Great Lakes Pilotage Authority From the Coast Guard to the Saint Lawrence Seaway Development Corporation, 60 Fed. Reg. 63,444 (Dec. 11, 1995). In support of this transfer, the Secretary invoked his general delegation authority under 49 U.S.C. s 322(b): "The Secretary may delegate, and authorize successive delegations of, duties and powers of the Secretary to an officer or employee of the Department."
Troubled by the safety implications of the transfer, appel- lants, two Great Lakes pilots and two associations of Great Lakes pilots, filed suit in the United States District Court for the District of Columbia claiming that the delegation exceed- ed the Secretary's authority under section 2104(a). Accord- ing to the Pilots, that provision permits the Secretary to transfer Pilotage Act responsibilities only to the Coast Guard, not to the St. Lawrence Seaway Development Corporation. The Department responded that section 2104(a) does not limit the Secretary's general authority to delegate responsibilities pursuant to section 322(b). Granting summary judgment for the Department, the district court found section 2104(a) "fully consistent with [section 322(b)'s] broader language." Halver- son v. Pena, 1996 WL 217885, *6 (D.D.C. 1996).
that is, the 'mention of one thing implies the exclusion of another thing,' " 129 F.3d at 185 (quoting Ethyl Corp. v. EPA, 51 F.3d 1053, 1061 (D.C. Cir. 1995)). The Secretary's asser- tion that section 2104(a) has wartime significance, the panel said, was "patently erroneous." 129 F.3d at 185. Concluding that "even if section 322(b)'s scope is ambiguous, requiring recourse to Chevron step two, we would be compelled to reject the Secretary's interpretation as unreasonable because it 'would deprive [section 2104(a)] of virtually all effect,' " the panel remanded to the district court with instructions to vacate the final rule. Id. at 189 (quoting American Fed'n of Gov't Employees v. FLRA, 798 F.2d 1525, 1528 (D.C. Cir. 1986)) (alternation in original).
The Pilots then applied for attorneys' fees and expenses under the Equal Access to Justice Act, 28 U.S.C. s 2412(d). The EAJA provides that "a court shall award to a prevailing party other than the United States fees and other expenses ... incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States ... unless the court finds that the position of the United States was substantially justified or that special cir- cumstances make an award unjust." 28 U.S.C. s 2412(d)(1)(A). The Secretary neither contested the Pilots' status as prevailing parties nor claimed the existence of "special circumstances." Instead, the Secretary argued that his interpretation of section 322(b) as authorizing the delega- tion of Pilotage Act responsibilities to the St. Lawrence Seaway Development Corporation was "substantially justi- fied." The district court agreed. Describing the issue as a "straightforward, almost textbook, administrative law prob- lem that was resolved by using well-established general prin- ciples of statutory interpretation," it denied the Pilots' EAJA application. Halverson v. Slater, No. 96-0028, Mem. Op. at 9 (D.D.C. Apr. 6, 1999). The Pilots now appeal.
has the burden of proving that its position, including both the underlying agency action and the arguments defending that action in court, was "substantially justified" within the mean- ing of the Act. See Wilkett v. ICC, 844 F.2d 867, 871 (D.C. Cir. 1988). "Substantially justified" means "justified in sub- stance or in the main--that is, justified to a degree that could satisfy a reasonable person. That is no different from ... [having] a reasonable basis both in law and fact." Pierce v. Underwood, 487 U.S. 552, 565 (1988) (internal quotation marks and citation omitted). While a court's "merits reason- ing may be quite relevant to the resolution of the substantial justification question," we have cautioned that "[t]he inquiry into the reasonableness of the Government's position ... may not be collapsed into our antecedent evaluation of the merits, for the EAJA sets forth a distinct legal standard." F.J. Vollmer Co., Inc. v. Magaw, 102 F.3d 591, 595 (D.C. Cir. 1996) (internal quotation marks omitted). For example, "be- cause 'unreasonable' may have different meanings in different contexts, even the presence of that term or one of its syn- onyms in the merits decision does not necessarily suggest that the Government will have a difficult time establishing that its position was substantially justified." Id. "The rele- vance of a court's reasoning on the merits to the reasonable- ness inquiry under the Equal Access Act thus depends on the nature of the case." Id.
able. Yet district courts have awarded fees just in such delicate circumstances. See, e.g., Kooritzky v. Herman, 6 F. Supp. 2d 1, 4 (D.D.C. 1997), rev'd in part on other grounds, 178 F.3d 1315 (D.C. Cir. 1999).
strength of the Department's claim that section 322(b) autho- rized the delegation.
Also in support of its conclusion that the Department's position at the agency level was substantially justified, the district court said that "there was virtually no question raised about the legal authority of the Secretary to proceed with the delegation of functions, and certainly no serious legal question raised by the Plaintiffs themselves." Id. at 7. Of course, had no one questioned the Department's authority, that fact might well have been relevant to the substantial justification analy- sis. But that isn't what happened. True, the Pilots did not file written comments challenging the Department's legal authority, but two groups of Congressmen did, and the De- partment discussed the issue at some length in the final rule. See Organization and Delegation of Powers and Duties; Transfer of Great Lakes Pilotage Authority From the Coast Guard to the Saint Lawrence Seaway Development Corpora- tion, 60 Fed. Reg. at 63,448-49.
holding: "In its opinion, the Court of Appeals then engaged in a rather lengthy, detailed Chevron analysis, concluding, under both step one and step two of Chevron, that 'the language of section 2104(a) compels the conclusion that the Congress did not intend to authorize the delegation of [Pilot- age Act] functions to a non-Coast Guard official.' " Id. (quot- ing Halverson, 129 F.3d at 185). But Vollmer requires that the district court do more than explain, repeat, characterize, and describe the merits panel decision. Under Vollmer, the district court must analyze the merits panel's reasoning to determine whether the Department's position, though reject- ed, was substantially justified.
The closest the district court comes to such an analysis are three observations: "There was no existing case law as to the interpretation of either [section 322(b) or section 2104(a)]." "[T]he legislative history was sparse and not dispositive." "There was nothing egregious, extreme, frivolous, or foolish in the positions taken by either party." Halverson, Mem. Op. at 7, 9. Although each of these observations may well be true, none answers the question before the district court-- was the Department's position before the merits panel sub- stantially justified within the meaning of EAJA?
Take the district court's first point. Had contrary case law existed, that fact certainly would have been relevant to the issue before the district court, for the Department's position most likely would not have been substantially justified. But the absence of contrary case law does not necessarily lead to the opposite conclusion, i.e., that the Department's position was substantially justified. There may be no contrary case law for reasons having nothing at all to do with whether the Department's position had merit. Perhaps until now secre- tarial delegations under sections 2104(a) or 322(b) had never been challenged. Or perhaps it had never occurred to the Department to argue that section 2104(a) permitted delega- tion to any agency other than the Coast Guard.
the merits panel's decision rested on its conclusion that "the plain meaning of Section 2104(a) limits delegation of [Pilotage Act] functions." Halverson, 129 F.3d at 181. As we have explained, "[c]ryptic" legislative history "surely is not enough to overcome the plain meaning of the statute." Ethyl Corp., 51 F.3d at 1063. Although at the Department's urging the merits panel did consider section 2104(a)'s legislative history, it concluded that "[t]he Secretary's attempts to overcome the plain meaning of section 2104(a) by reference to its legislative history are equally unsuccessful." Halverson, 129 F.3d at 187.
Finally, a Government position that is neither "foolish," "egregious," "extreme," nor "frivolous" is not necessarily substantially justified. For EAJA purposes, substantially justified means "justified in substance or in the main--that is, justified to a degree that could satisfy a reasonable person." Pierce, 487 U.S. at 565 (internal quotation marks and citation omitted). Although a frivolous Government argument is obvi- ously neither reasonable nor substantially justified, the oppo- site is not necessarily true: an unreasonable--not substantial- ly justified--argument need not be frivolous. Words like "foolish," "egregious," and "extreme" are equally weak mea- sures of EAJA fee liability.
For all of these reasons, we cannot sustain the district court's finding that the Department's position either at the agency level or in litigation was substantially justified. We thus turn to our own analysis of the Department's argument that its reliance on section 322(b) was substantially justified. See Jacobs v. Schiffer, No. 99-5217 (D.C. Cir. March 7, 2000), Slip. Op. at 7-8 ("Because the question of whether the Department's position was substantially justified can be an- swered as a matter of law, a remand is unnecessary....").
states that "the interpretation the government espoused with respect to the meaning of section 2104(a) was supported under the precedent cited in the Federal Register notice and also argued in Court." What precedents? Reviewing the final rule ourselves, we can find no citations to relevant decisions of either this court or any other court. If the Department means to refer to precedents cited in its brief before the merits panel, the Department should have identi- fied the cases and explained why they show that its position was substantially justified. Having done neither, and falling far short of sustaining its burden of proof, the Department's brief simply repeats in summary fashion the arguments made before the merits panel.
The Department has failed to demonstrate that its position was substantially justified for a very good reason: the merits panel, as even a cursory review of its opinion reveals, found the Department's position entirely without merit. Rejecting the Department's section 322(b) argument on Chevron step one grounds, the panel held that "the plain meaning of section 2104(a) limits delegation of [Pilotage Act] functions to the United States Coast Guard and that section 322(b) cannot fairly be construed to expand the limitation." Halverson, 129 F.3d at 181. The panel reached this conclusion through an elementary application of three standard canons of statutory construction, finding resort to other tools of statutory con- struction or legislative history entirely unnecessary. "[E]ven if section 322(b)'s scope is ambiguous, requiring recourse to Chevron step two," the panel concluded, it was "compelled to reject the Secretary's interpretation as unreasonable because it 'would deprive [section 2104(a)] of virtually all effect.' " Id. at 189 (quoting American Fed'n of Gov't Employees, 798 F.2d at 1528).
issue over "which reasonable minds could differ." Halverson, Mem. Op. at 9. If the Department's position in this case was substantially justified, we can hardly imagine an EAJA case that the Government will ever lose.
considered the relevant statute and surrounding provisions, evaluated the legislative history, found inconclusive the appli- cation of several canons of construction, and inquired into the purpose of the statute before resting our decision on an ancillary provision that made Congress's intent sufficiently clear to resolve the case at Chevron step one. Id. at 1340-48. By comparison, the merits panel's rejection of the Depart- ment's argument in this case rested on the easily ascertain- able plain meaning of one provision, section 2104(a).
A final point about our analysis of the merits panel's decision. The panel characterized the Department's position in various ways, including "patently erroneous" and "irrecon- cilable with" canons of construction. Halverson, 129 F.3d at 185. Of course, not all panels use language the same way. Another panel equally unpersuaded by the Department might have used words like "unsupported," "unconvincing," or sim- ply "without merit." We thus think it would be unwise for a prevailing party's eligibility for EAJA fees to turn solely on the particular words a particular merits panel uses to de- scribe the Government's position. Thus in Vollmer, although we took account of the merits panel's characterization of the Government's position as "incredible," we ultimately rested our award of EAJA fees on our own conclusion that the Government had offered nothing to demonstrate that its position was substantially justified. Here too we have cer- tainly considered the merits panel's words, but our EAJA conclusion rests primarily on our view, informed by an analy- sis of the merits panel's opinion, that the case was easy and the Department's arguments worthy of little credence, as well as on the Department's failure to offer any convincing rea- sons for believing that its interpretation of section 322(b) was substantially justified.
The decision of the district court is reversed, and the case is remanded for the district court to calculate the amount of fees and expenses the Department must pay to the Pilots.

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