Court Opinion

ID: 8918088
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:56:49.449822+00
Date Added: 2024-06-11T17:09:10.824836
License: Public Domain

NEWMAN, Circuit Judge,
dissenting:
If there were Ten Commandments for judges, one of them would surely be “Thou shalt not deter settlements.” In this case the majority holds that the positions taken by the United States during settlement of the litigation were not “substantially justified” within the meaning of the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d)(1)(A) (Supp. V 1981), and that the Government is therefore liable for the plaintiffs’ attorney’s fees. I respectfully dissent because (1) the statute does not make liability for fees turn on positions taken during settlement negotiations and (2) if it did, there would have to be a remand in this case to provide an opportunity for the District Court to determine what in fact happened during the settlement negotiations. The majority’s unprecedented construction of EAJA and the scrutiny of settlement negotiations required by that construction have a serious potential for inhibiting the orderly settlement of litigation, a result not likely to have been intended by Congress and one to be resisted unless the Congressional mandate is clear.
When the plaintiffs’ fee application was presented to the District Court, all parties and the Court understood the fee dispute to concern primarily whether the “position of the United States” to be examined for sub-stantiality was limited to the so-called “litigating position,” i.e,, the position asserted by the Government’s lawyers in the courtroom, or could also include the so-called “underlying position,” i.e., the position, taken by the agency in the field, that gave rise to the dispute. As the majority recognizes, the Circuits are divided on that question. Compare Spencer v. NLRB, 712 F.2d 539, 546-57 (D.C.Cir.1983) (litigating position only); Tyler Business Services, Inc. v. NLRB, 695 F.2d 73, 75-76 (4th Cir.1982) (same); Broad Avenue Laundry and Tailoring v. United States, 693 F.2d 1387, 1390-91 (Fed.Cir.1982) (same), with Natural Resources Defense Council, Inc. v. EPA, 703 F.2d 700, 706-12 (3d Cir.1983) (underlying position included). See also S & H Riggers & Erectors, Inc. v. OSHRC, 672 F.2d 426, 429 (5th Cir. Unit B 1982) (referring to the Government’s “position before this court”). The District Judge stated that if he were to examine only the “litigating position,” he would be “compelled to conclude” on the record before him that the Government’s position was substantially justified, Environmental Defense Fund, Inc. v. Watt, 554 *1088F.Supp. 36,41 (E.D.N.Y.1982). Ruling prior to the decisions of the three circuits that have construed EAJA to make pertinent only the “litigating position,” the District Judge interpreted the Act to include examination of the “underlying position.” Finding that position not substantially justified, he awarded fees. In this Court appellees seek to defend that award solely on the basis that the “underlying position” may be examined.-
The majority finds it unnecessary to choose between the “litigating position” and the “underlying position” constructions of EAJA. Instead, the Court holds that even if “substantial justification” is to be determined solely from the Government’s “litigating position,” that position was not substantially justified because settlement negotiations took seven months and there is a “strong inference” that the delay was caused “by the government’s insistence upon positions which appellees opposed and which were not finally incorporated into the stipulation.” Slip op. at 1086.
In my view, determination of the Government’s “litigating position” should be based solely on the positions the Government formally takes during the litigation as reflected in its pleadings, motions, arguments, objections, and other representations made on the record in the course of the lawsuit. To assess the length of time of settlement negotiations and to draw inferences as to the likely position of the Government during those negotiations is to create a needless deterrent to settlement. That is especially so in a case like this where, during the pendency of the settlement negotiations, the defendants were taking no adverse action against the plaintiffs. The spraying permits, challenged by the litigation, had been terminated, and the next spraying season would not commence until the following spring, after the settlement was concluded. If a plaintiff is concerned that the Government is protracting settlement negotiations as a ruse to maintain adverse action being taken in the field, it always has the option of breaking off negotiations and moving for default, a step that will require the Government to file a responsive pleading and thereby place on the record its position in the lawsuit. When the Government offers no courtroom opposition whatever to a complaint and promptly enters into negotiations that produce a settlement, sparing the District Court the need to adjudicate any substantive aspect of the case, I think its conduct should be applauded. Instead, the majority condemns the Government and penalizes it with the cost of the plaintiffs’ attorney’s fees. It will take clearer language than anything I can find in the Equal Access to Justice Act to persuade me that Congress intended such a result.
If the Government had taken a position in the litigation opposed to plaintiffs’ complaint and thereafter receded from its opposition and settled, the plaintiffs might well have been entitled to attorney’s fees as prevailing parties, see H.R.Rep. No. 96-1418, 96th Cong., 2d Sess. 11 (1980), reprinted in 1980 U.S.Code Cong. & Ad.News 4984, 4990. At least the Government’s position in the litigation could then be assessed to determine if it was substantially justified, without passing judgment upon and thereby inhibiting the settlement process. I fully agree with the majority that Congress did not intend that the Government “automatically be immunized” from paying fees whenever it settles a lawsuit. I would impose liability every time the settlement followed the assertion of a litigating position that was not substantially justified. That will carry out the congressional purpose of rewarding a litigant for challenging official actions that the Government seeks to defend, without substantial justification, in the courtroom. But I do not agree that fees should be awarded when the Government offers no courtroom opposition at all. The majority endeavors to find some support for its view that “litigating position” includes settlement stance from a comment by the District of Columbia Circuit in Spencer v. NLRB, supra, 712 F.2d at 555 n. 58. The Court there noted that the Government will be liable for the plaintiff’s fees if it “initially opposes his claims and then at some later stage (e.g., in a pre-trial settlement) surrenders.” That observation provides no support for the award of fees in this case because the Government here did not initially oppose the plaintiffs’ claims. *1089The Government has never taken any position in this lawsuit that is adverse to the merits of the plaintiffs’ claims. There was no motion to dismiss the complaint, no answer to the complaint, and no challenge in any form to the complaint. The only opposition of any sort was opposition to the request for a temporary restraining order. That request was denied because the Government represented that no spraying would occur without 48 hours’ notice to the plaintiffs and because Suffolk County had not been joined as a party defendant. The majority makes no claim that opposition to the requested TRO was not substantially justified.
The majority’s citation of Ellis v. United States, 711 F.2d 1571 (Fed.Cir.1983), and Ward v. Schweiker, 562 F.Supp. 1173 (W.D. Mo.1983), also provides no support for an examination of settlement positions or duration. In both cases the Government actively litigated in opposition to the plaintiff’s claims, filing a motion for summary judgment in Ellis, see Ellis v. United States, 610 F.2d 760 (Ct.C1.1979), and a motion to dismiss for failure to state a claim in Ward, 562 F.Supp. at 1176. In sum, until today, no court has found the position of the United States not “substantially justified” because of any settlement negotiations, much less negotiations that took place while the Government was neither opposing the plaintiffs’ claims in court or acting adversely to the plaintiffs outside the courtroom.
If settlement negotiations were an appropriate matter for inquiry under EAJA, the Government would be entitled to have this case remanded to the District Court so that a record could be made as to whether the Government’s position during the negotiations was substantially justified. Though the Government has the burden of proving its position to be substantially justified, see Knights of the Ku Klux Klan Realm of Louisiana v. East Baton Rouge Parish School Board, 679 F.2d 64, 68 (5th Cir.1982); H.R.Rep. No. 96-1418, supra, at 10 — 11, reprinted in 1980 U.S.Code Cong. & Ad.News at 4989-90, it cannot be faulted for not offering evidence of its settlement stance since until today no court had ever held that such evidence was relevant.
In the absence of evidence and findings by the District Court as to what actually happened during the negotiations, the majority has, in my view, an insufficient basis for its conclusion that the Government’s position was not substantially justified. The majority relies initially on the seven-month period during which the negotiations occurred, rejecting as clearly erroneous the District Court’s finding that the case was settled “shortly” after it was filed, 554 F.Supp. at 40. I see no basis for discarding that finding, especially when we know that both sides understood that the problem of spraying was not going to recur until the following spring at the earliest. With the passage of time from September to March having no adverse consequence whatever, the likely inference, in the absence of facts, is that the parties simply exchanged drafts of a consent decree at a pace to suit their own convenience. For all we know the major share of the delay was attributable to the plaintiffs. In any event, seven months is slightly less than the median time for disposing of civil cases in the Eastern District of New York. See Administrative Office of the United States Courts, Federal Court Management Statistics 27 (1983).
More disturbing to me is the majority’s willingness to draw an inference that the delay was caused by the Government’s insistence on unsupportable positions. I see no basis for drawing that inference. We have nothing in the record to indicate the initial basis on which the Government was willing to settle, nor the initial demand of the plaintiffs. Oral argument, on which the majority relies, was not illuminating on this score, primarily because appellate counsel for the Government had not participated in, and had no knowledge of any aspects of, the settlement negotiations. What we did learn from plaintiffs’ counsel was that their contention, advanced during the negotiations, that future spraying would require preparation of an Environmental Impact Statement (EIS), 42 U.S.C. § 4332(2)(C)(i) (1976), was not included in the consent decree. The decree commits the Government to compliance with the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-4361 (1976 & Supp. V 1981), with*1090out any agreement that NEPA would require an EIS if the spraying challenged in this case should recur.
Since, until today, no one connected with this litigation thought that the positions taken by the Government during settlement negotiations were relevant to its liability for attorney’s fees, there should at least be a remand to permit the Government to show the District Court that its position during the negotiations was substantially justified.
My fundamental disagreement, however, is with the majority’s ruling that settlement negotiations are even relevant under EAJA. I would assess the Government’s “litigating position” solely on the basis of its positions taken on the record in the course of the litigation. And I agree with the views of the Fourth, District of Columbia, and Federal Circuits that only the Government’s “litigating position” should be examined in determining under EAJA whether the position of the United States was substantially justified. For these reasons, I respectfully dissent.