Opinion ID: 199369
Heading Depth: 1
Heading Rank: 3

Heading: The Fee Award: What Proceedings are Covered by the EAJA?

Text: 33 The Secretary argues that appellants should be limited in any award of attorney's fees to expenses associated with the court action and should not recover fees stemming from the administrative proceedings before the ALJ and ARB. Appellants counter that the EAJA entitles them to fees for both the judicial and administrative stages of the litigation. Because we have concluded that the Secretary's position before the ALJ was substantially justified, appellants may not be reimbursed for expenses through the time of the ALJ's decision. We must consider, however, whether a fee award is appropriate for the costs of litigating before the ARB. 34 In addition to providing for an award of fees and other expenses incurred in a civil action in federal court, see 28 U.S.C. § 2412(d)(1)(A), the EAJA specifically allows a court to award fees for an administrative proceeding that qualifies as an adversary adjudication under 5 U.S.C. § 504(b)(1)(C), see 28 U.S.C. § 2412(d)(3). Section 504, in turn, defines such an adjudication as one under section 554 [of the Administrative Procedure Act (APA)] in which the position of the United States is represented by counsel or otherwise. . . . APA section 554 applies . . . in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing, with some exceptions not relevant here. 5 U.S.C. § 554(a). 35 The Secretary argues that this sequence of statutory provisions does not permit Dantran to recover fees and expenses for the ARB proceedings because, notwithstanding the proceeding's adversary nature and the Secretary's representation by counsel, the debarment hearing was not required by statute and thus was not an adjudication within the coverage of the EAJA. She emphasizes that only fees within the explicit language of the statute are recoverable because the EAJA must be strictly construed as it is a waiver of the government's sovereign immunity. See Ardestani v.INS, 502 U.S. 129, 137 (1991) (a waiver of sovereign immunity must be strictly construed in favor of the United States); Fidelity Constr. Co. v. United States, 700 F.2d 1379, 1386 (Fed. Cir. 1983) (Although the EAJA lifts the bar of sovereign immunity for awards of fees in suits brought by litigants qualifying under the statute, it does so only to the extent explicitly and unequivocally provided.), superseded in part by statute, 5 U.S.C. § 504(b)(1)(C) (specifying that certain proceedings under the Contract Disputes Act are adversary adjudications under the EAJA). 36 Appellants maintain, however, that a hearing that meets the EAJA definition is mandated by the Service Contract Act. They point to SCA section 354(a), which provides in relevant part as follows: 37 Where the Secretary does not otherwise recommend because of unusual circumstances, he shall, not later than ninety days after a hearing examiner has made a finding of a violation of this chapter, forward to the Comptroller General the name of the individual or firm found to have violated the provisions of this chapter. 38 41 U.S.C. § 354(a) (emphasis added). They emphasize that this provision does not leave it to the Secretary's discretion whether to conduct hearings on debarment, but explicitly authorizes the penalty to be imposed only after a finding by a hearing examiner (also called an ALJ) that such penalty is warranted. They further point out that the proceedings conducted under section 354(a) do conform to the requirements of an adversary adjudication under the APA, with representation by counsel and all of the other procedural protections specified in 5 U.S.C. §§ 554-557. See generally 29 C.F.R. §§ 6.1-6.20, 8.1-8.13. 39 We are persuaded by multiple considerations that appellants have the better argument. Like appellants, we read the language in section 354(a) to require a hearing. The statute expressly links the Secretary's obligation to place a contractor on the ineligible list to a hearing examiner's finding of a violation. 12 That the statute does not command a hearing on the record - in the language of APA section 554 - is of modest significance, as it has long been recognized that the applicability of the APA does not turn on the presence or absence of the precise words 'on the record,' Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 876 (lst Cir. 1978) (citing United States v. Florida East Coast Ry. Co., 410 U.S. 224, 245 (1973)). See also St. Louis Fuel and Supply Co. v. F.E.R.C., 890 F.2d 446, 448 (D.C. Cir. 1989) (Our decision . . . does not turn, mechanically, on the absence of magic words.) 13 ; Marathon Oil v. EPA, 564 F.2d 1253, 1262-63 & nn. 30, 31 (9th Cir. 1977) (similar, referring to the magical phrase 'on the record'). Rather, the resolution of this issue turns on the substantive nature of the hearing Congress intended to provide. Seacoast Anti-Pollution League, 572 F.2d at 876. 40 We have no reason to doubt that Congress intended this adjudication to be governed by standard APA procedures. As we previously have observed, an adjudication such as this, which involves specific factual findings with potential for serious impact on private rights, is exactly the kind of quasi-judicial proceeding for which the adjudicatory procedures of the APA were intended. Id. (citation omitted); see also id. at 878 ('[I]t is assumed that where a statute specifically provides for administrative adjudication (such as the suspension or revocation of a license) after opportunity for an agency hearing, such specific requirement for a hearing ordinarily implies the further requirement of a decision in accordance with evidence adduced at the hearing.' (quoting Attorney General's Manual on the Administrative Procedure Act (1947))). Neither the SCA itself nor case law excludes proceedings under the Act from APA coverage. Cf., e.g., Ardestani, 502 U.S. at 133-34 (Supreme Court precedent established that deportation proceedings are not subject to the APA); Owens v. Brock, 860 F.2d 1363,1365 (6th Cir. 1988) (a provision of the Federal Employees Compensation Act specifically excludes workers' compensation proceedings from coverage under section 554). 14 Indeed, both the parties and district court invoked the judicial review provisions of the APA as the basis of jurisdiction. 41 Moreover, a careful review of the relevant statutory provisions suggests that the APA is indirectly made applicable by statute to debarment proceedings under the SCA. Section 353 of Title 41 - the SCA section preceding the one on which appellants rely - incorporates the enforcement authority granted to the Secretary under certain provisions of another statute, the Walsh-Healey Act. See 41 U.S.C. §§ 353(a), 38, 39. 15 Pursuant to yet another provision of Walsh-Healey, 41 U.S.C. § 43a(a), the APA is applicable in the administration of sections 35 to 39 of that Act, a grouping that includes the provisions governing the Secretary's enforcement of the SCA. By that chain of relationship, all of the requirements for EAJA coverage would be met: a hearing required by statute, with counsel representing the government, governed by the provisions of the APA. 16 42 The Secretary notes that regulations implementing the EAJA within the Department of Labor explicitly foreclose the award of attorney's fees for SCA proceedings before the ARB. See 29 C.F.R. § 8.19. 17 She also points to a regulation listing the programs within the Department to which the EAJA is applicable, see id. at § 16.104(a), and argues that the omission of SCA hearings from the list is further proof that fees are unavailable for such proceedings. Several administrative decisions on which the Secretary relies also hold that SCA hearings do not qualify as adversary adjudications under the EAJA. See, e.g., Nationwide Bldg. Maint., Inc., BSCA Case No. 92-04, at 8 (Oct. 30, 1992);Pat's Janitorial Serv., Inc., Case No. 81-SCA-1308, Dep. Sec. Dec., at 8 (July 7, 1988). 43 We consider this administrative authority to be of limited value. Agency regulations interpreting a statute that relates to matters outside the agency's area of expertise are entitled to no special deference, see Adams Fruit Co. v. Barrett, 494 U.S. 638, 649-50 (1990), and eligibility for attorney's fees under the EAJA is not within the Department of Labor's particular knowledge, seeArdestani, 502 U.S. at 148 (Blackmun, J., dissenting) (Because the EAJA, like the APA, applies to all agencies and is not administered by any one in particular, deference to the interpretation by any particular agency is inappropriate.). In addition, the administrative rulings cited by the Secretary do not consider section 354's reference to a hearing examiner's finding of a violation, focusing instead on the discretion given to the Secretary under section 353 'to make rules and regulations and to hold hearings,' Pat's Janitorial Serv., at 5 (quoting Verticare, Case No. 82-SCA-44, Dep. Sec. Dec. (June 7, 1988)). 44 Moreover, one of the regulations cited by the Secretary suggests an inconsistency in the regulatory scheme. As noted, section 16.104 of the Department's regulations lists a variety of proceedings that are considered adversarial adjudications covered by the EAJA when all other conditions in that statute and the Department's rules are met. The list includes [v]iolations and debarment in Federal contracts under the Walsh-Healey Act. 29 C.F.R. § 16.104(a)(2)(ii). Because the SCA specifically incorporates the enforcement procedures of the Walsh-Healey Act, we think it significant that the Department explicitly deems the EAJA applicable to debarment proceedings under that referenced statute. Logically, if debarment proceedings under the Walsh-Healey Act are embraced by the EAJA, equivalent proceedings under the SCA also should be covered. 45 We see no need to delve more deeply into the complexities of the regulatory scheme, having come this far primarily to show its inconclusiveness and, to a lesser extent, its arguable endorsement of fee recovery for adversary adjudications of debarment. Our holding rests not on the agency's views but on our conclusion that the hearing prescribed by section 354 satisfies the APA requirement for a statutorily mandated adjudication that is adversarial in nature. 46 Because the adjudication of debarment is required by statute, is adversarial in nature, appears intended by legislation to be covered by the APA, and implicates interests traditionally protected by APA procedures - and because it is not otherwise excluded from APA coverage - we hold that appellants are entitled to fees and expenses associated with the proceedings before the ARB.