Court Opinion

ID: 9471558
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:35:39.635194+00
Date Added: 2024-06-11T17:42:28.005014
License: Public Domain

WALD, Circuit Judge,
dissenting:
The “position” taken by the United States in this litigation was not, in my view, “substantially justified.” The government’s position in court effectively conceded the appellant’s claim that the contract should not be immediately cancelled; in other words, its position was that it would not — presumably could not — defend its actions vis-a-vis Del.1 Thus, an interpretation *987that an immediate surrender in these circumstances is a “substantially justified” position for the United States such as to protect it from attorneys’ fee liability under the Equal Access to Justice Act seems to mock both the language and the purpose of the statutory scheme. It means that the government can dally at will through the administrative process — or, as in this case, squeeze the plaintiff between two bickering agencies — and then, after forcing the plaintiff to file a suit, avoid fee liability by a prompt confession of error. This result is particularly ironic since this court has already held that if the government, without a sufficient justification, waits even a little while into the litigation to cave, as in Environmental Defense Fund v. EPA, 716 F.2d 915 (D.C.Cir.1983), it will be liable for attorneys’ fees.
I realize that Spencer v. NLRB, 712 F.2d 539 (D.C.Cir.1983), if taken to the wall, might seem to mandate this result. However, I do not believe it must be so read. Spencer itself dealt with quite a different situation, in which the government raised a wholly valid legal argument as to why the court should not hear the plaintiff’s case on the merits. Id. at 567. Only in dicta did the court consider a case in which the government’s “litigation position” was compíete capitulation. Id. at 555-56. I do not find that dicta so persuasive that I would convert it into a holding at the expense of logic and statutory purpose. First, the court focused in its discussion of Example Five on a case in which the plaintiff acted precipitously, going to court before it gave the government a chance to resolve the dispute through its own administrative mechanisms. Id. at 555-56. Just the opposite occurred here. The appellant did everything it could to protect its interests and to resolve the interagency squabble before resorting to litigation. Indeed, the facts of Spencer’s Example Five are rather unrealistic to the extent that they suggest that one may invoke the aid of a court against agency action without regard for doctrines such as finality that are designed to permit the agency adequate opportunity to resolve disputes outside of the courts. In short, I do not believe that Spencer’s brief discussion in dicta of a hypothetical case superficially resembling that before us compels the majority’s result.
Nor does Spencer’s interpretation of the statute as focusing on the reasonableness of the United States’ “litigating position” rather than its underlying actions require us to accept this irrational result. The *988court in Spencer, id. at 548, found strong support for the view that “position of the United States” meant “litigating position” in the following language from House and Senate reports: “Where the Government can show that its case had a reasonable basis both in law and in fact, no award [of attorneys’ fees] will be made.” H.R.Rep. No. 1418, 96th Cong., 2d Sess. 10 (1980); S.Rep. No. 253, 96th Cong., 1st Sess. 6 (1979). This language, which appears to be the clearest and most authoritative evidence in support of the view adopted in Spencer that Congress intended courts to evaluate the merits of the government’s litigating position, seems to me completely at odds with the view that immediate surrender is a substantially justified litigating position. How can the government’s admission that it has no case at all be a case with “a reasonable basis both in law and fact”? Although the majority correctly notes that the appellee took the position in oral argument that the government’s litigating position was reasonable, we are not bound by this concession, particularly because it is based on what I believe is a misinterpretation of the law.
I believe that the Equal Access to Justice Act requires the award of fees to a prevailing party unless the government can show that its position that the plaintiff should not prevail was substantially justified. Threshold or “technical” defenses, such as the one at issue in Spencer or other defenses on such grounds as jurisdiction, finality, standing, or statute of limitations, as well as defenses on the merits, may of course make out a case with a reasonable, or substantially justified, basis in the law and the facts as to why the plaintiff should not prevail in court. However, immediate capitulation — the government’s admission that it has no case — does not. Traditional doctrines such as ripeness and finality of agency action tend to ensure that a party cannot file a complaint against the government until after administrative measures have failed to secure relief. But even if there are cases where this is not true, such as constitutional tort actions, I believe that the government does not carry its statutory burden of demonstrating that its litigating position was substantially justified by simply conceding that it has no defenses to assert. Even where immediate capitulation is the most reasonable response to a meritorious claim, as it was here, it is not a substantially justified case with “a reasonable basis both in law and fact.”
The extent of government liability that would be incurred upon immediate surrender would ordinarily be minimal — the plaintiffs’ attorneys’ fees for preparing a complaint and supporting papers. Nevertheless, the effect of this potential liability on the decisions of the government and the potential plaintiff would further the essential purposes of the Equal Access to Justice Act. ' For its part, the government would have an added incentive to resolve disputes before the point at which the plaintiff is entitled to go to court. As it stands under the alternative interpretation the government has no such incentive; it can remain intransigent throughout the administrative process and hope that the individual is unwilling to undertake the expense of challenging its action in court. If the government loses its gamble and finds itself in court nonetheless, it can then simply give up at no cost whatsoever. Yet this is precisely the kind of bullying that Congress hoped to deter by permitting the award of attorneys’ fees for successful challenges to government action. See, e.g., S.Rep. No. 253, supra, at 7 (“When there is an opportunity to recover costs, a party does not have to choose between acquiescing to an unreasonable Government order or prevailing to his financial detriment.”); 125 Cong.Rec.S. 10933 (statement of Sen. Kennedy) (“We can no longer tolerate a legal system under which unreasonable government action affecting small businesses ... goes unchallenged because the victims are deterred by the legal expense involved.”).
Once in court, the government lawyers under my interpretation would have an incentive to assert any and all defenses they believe to be substantially justified rather than immediately conceding to the plaintiff. This does not disturb me. First, there is no *989reason to believe that the government would otherwise abstain from asserting reasonable defenses. Second, the government must take into account not only the possibility of escaping fees altogether by mounting a substantially justified defense but also the possibility of greater liability if its defenses are found not to be substantially justified down the line. On balance I don’t believe that the marginal exposure to liability for fees in cases of immediate surrender should or will weigh significantly in government responses to litigation.
The potential plaintiff might have a slightly greater incentive to bring suit under my interpretation. However, the marginal possibility of fees upon immediate surrender could only affect the plaintiff’s decision when it believes it has a sure winner — a case against which no substantially justifiable defenses can be asserted. The possibility that some such cases that could be resolved more informally will instead be resolved in the context of litigation is, nonetheless, far outweighed in my mind by the prospect created by the other interpretation, i.e., that some sure winners — cases in which the government’s conduct is indefensible — may not be brought to court and resolved at all because of the noncompensable expense of litigation. Again, Congress set out to remedy just this problem in permitting the assessment of attorneys’ fees against the government.
This court has taken a fundamentally different position on the scope of the Act from the Third Circuit. NRDC v. EPA, 703 F.2d 700 (3d Cir.1983). Yet I find Judge Gibbons’ crie de coeur on the effects of that interpretation generally to be especially disquieting in a case like this. Under the panel’s ruling,
... no matter how outrageously improper the action has been, and no matter how intransigently a wrong position has been maintained prior to the litigation, and no matter how often the same agency repeats the offending action, the statute has no application so long as employees of the Justice Department act reasonably [at the first moment] when they appear before the court.
Id. at 706-07. I do not believe that Spencer requires us to embrace this result under the circumstances of this case: Any litigator [and judge] knows that to “act reasonably” in court is not necessarily the same as to have a substantially justified litigating position. Often, as here, the path of reason lies in recognizing one does not have any rational litigating position and acting accordingly by conceding.
Even if the main battle has been lost for Judge Gibbons’ point of view in this circuit, the wiping-up operations performed by the present ruling are unnecessarily thorough to my thinking. The Justice Department’s concession in the courts that it cannot defend the government’s actions in this case is not a “substantially justified” litigating position, and I would therefore affirm the district court’s grant of attorneys’ fees to the appellant under the Equal Access to Justice Act.

. The majority takes issue with this view of the government’s “litigating position.” See Maj.Op. at 984, 985 n. 10. It says it is more *987“accurately characterized” as an attempt, once the complaint was filed, to resolve the controversy as quickly and practically as possible. The critical difference lies in our varied percep- • tions of what “litigating position” means. “Litigating position,” of course, is only judicial shorthand for the statutory term, “position of the United States,” whose meaning, in turn, must be informed by the Act’s legislative history. The majority reads that term to include anything the government does after a complaint is filed, while I read the crucial language in the legislative history to require the government to “show that its case [in court] had a reasonable basis both in law and fact.” Infra at 987, 988 (citing House and Senate reports). This language tells me that Congress intended to place a heavier burden on the government than can be met by a post-hoc rationalization of its failure to present any case at all. I point out, in that respect, that the record before us does not reveal the government’s actual motivation, as opposed to its later explanation, for immediately giving the plaintiff the very relief it had withheld until the TRO was filed. Nor could we expect the record in such a situation ordinarily to provide such information, a fact worth considering in deciding whether we wish to adopt an interpretation of litigating position that requires a case-by-case examination of the motives of counsel in cases like this. All the record shows here is that after months of inter-agency haggling, Del was able to rescue its contract and the substantial start-up costs already incurred only by moving in court for a temporary restraining order to stop cancellation. The government had more than ample time before that point to pursue its beneficent goal of avoiding “litigation with all its associated costs to the government, private parties, and the courts.” Maj.Op. at 984, 985 n. 10. Finally, contrary to the majority’s assertion, my view of what constitutes a substantially justified litigating position would not require courts “[t]o evaluate whether the underlying agency action [in cases like this] was ‘substantially justified.’ ” Id. It would, however, require (1) that the government articulate in some fashion its position — legal or factual — as to why it should prevail in court, and (2) that a court determine whether that position was substantially justified. The statute appears to require no less.