Opinion ID: 2197680
Heading Depth: 1
Heading Rank: 3

Heading: Substantially Justified

Text: Even assuming arguendo that petitioner satisfied the prevailing party threshold to fee recovery under the State EAJA, the State's position in this litigation was substantially justified. The phrase substantially justified has been interpreted by the Supreme Court as meaning justified to a degree that could satisfy a reasonable person, or having a `reasonable basis both in law and fact' ( Pierce v Underwood , 487 US 552, 565, supra ). Moreover, absent an abuse of discretion, a determination by the lower courts that the Government's position was substantially justified is entitled to deference ( id. , at 562-563). The legislative history of the State EAJA indicates that New York courts should look to the Pierce decision when determining whether the State's position was substantially justified ( see , Assembly Mem, 1989 NY Legis Ann, at 335 [The test of whether or not a government action is substantially justified is essentially one of reasonableness. Where the government can show that its case had a reasonable basis both in law and fact, no award will be made]; Governor's Approval Mem, op. cit. , 1989 NY Legis Ann, at 336 [indicating that Pierce's interpretation of substantially justified should be followed in interpreting State statute]). Petitioner argues that respondent's position in this case cannot be considered substantially justified in light of its irrational interpretation of the amended regulation. In Roanoke Riv. Basin Assn. v Hudson (991 F.2d 132, cert denied ___ US ___, 114 S Ct 182), as in this case, the plaintiff prevailed on one issue while the government agency prevailed on all others. The Court of Appeals for the Fourth Circuit affirmed the District Court's denial of attorney's fees on the ground that the position of the government agency was substantially justified, rejecting a per se rule that whenever a petitioner clearly prevails on any issue, a fee award follows ( id. , at 139). The court concluded that it was appropriate to consider the government's position in the case as a whole when determining the reasonableness of its position: We do not think these two prongs of the EAJA  whether the petitioner is a prevailing party and whether the government's position is substantially justified  were intended to be so closely linked.    The focus when determining whether a petitioner is a prevailing party is aimed at the degree of success obtained by the petitioner. Whether the government's `position in the litigation' is substantially justified, in contrast, focuses, not on the government's success or failure, but on the reasonableness of its position in bringing about or continuing the litigation. While the EAJA redresses governmental abuse, it was never intended to chill the government's right to litigate or to subject the public fisc to added risk of loss when the government chooses to litigate reasonably substantiated positions, whether or not the position later turns out to be wrong. In short, the policy considerations underlying these two prongs of the EAJA differ, justifying the different scopes of focus ( id.; see , Commissioner, Immigration & Naturalization Serv. v Jean , 496 US 154, 161-162, supra [While the parties' postures on individual matters may be more or less justified, the EAJA  like other feeshifting statutes  favors treating a case as an inclusive whole, rather than as atomized line-items]). We agree with the Fourth Circuit Court of Appeals that an issue-by-issue analysis of the government's posture in the litigation should be rejected in favor of a more broadly focused analysis that would reject the view that any unreasonable position taken by the government in the course of litigation automatically opens the door to an EAJA fee award ( Roanoke , supra , at 139; see also , Assembly Mem, op. cit. , 1989 NY Legis Ann, at 335 [substantially justified standard should not be read to raise a presumption that the State's position was not substantially justified simply because it lost the case]). Turning to the present case, we note that the central controversy concerned the validity of the change in payment methodology embodied in the amended regulation. In this respect, respondent's position was completely vindicated. Although petitioner gained the benefit of an ameliorative measure  correction of respondent's overbroad interpretation of the amended regulation  when respondent's position is considered in its entirety , the only logical conclusion is that it was substantially justified, i.e, it had a reasonable basis in both fact and law ( see , Pierce , supra ). Thus, the Appellate Division did not abuse its discretion in refusing to award attorney's fees under the circumstances of this case. Finally, we conclude that the remaining issues raised by petitioner were correctly resolved by the Appellate Division. Accordingly, the order of the Appellate Division should be affirmed, with costs. Order affirmed, with costs.