Court Opinion

ID: 9470446
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:06:35.507699+00
Date Added: 2024-06-11T17:41:54.539552
License: Public Domain

JAMES HUNTER, III, Circuit Judge,
concurring and dissenting:
I concur in Judge Gibbons’ holding that the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A) (1976 & Supp. V 1981) (“EAJA”) is applicable to a petition for counsel fees incurred in a review proceeding pursuant to section 509 of the Clean Water Act, 33 U.S.C. § 1369 (1976). I respectfully dissent from Judge Gibbons’ holding that the term “position” refers to the agency’s pre-litigation position. I also dissent from his holding that the position of EPA was not substantially justified in this case.
I would hold that in examining a petition for counsel fees pursuant to section 2412(d)(1)(A) of the EAJA, a court must look at the government’s litigation position to determine whether it is substantially justified. Because I find that EPA’s position was substantially justified in this case, I would deny NRDC’s petition for counsel fees.
I. Definition of the Terms
In determining that “the position of the United States was substantially justified,” I begin by examining what Congress meant when it used the terms “position” and “substantially justified.” As Judge Gibbons notes, there has been disagreement among courts construing the EAJA over whether “position” refers to the government’s initial action prompting the lawsuit or whether “position” refers to the government’s litigation position. All of the circuit courts which have addressed this issue, however, have concluded that the term refers to the government’s litigation position. See Broad Avenue Laundry and Tailoring v. United *718States, 693 F.2d 1387, 1390-91 (Fed.Cir. 1982); Tyler Business Services, Inc. v. NLRB, 695 F.2d 73, 75 (4th Cir.1982); see also S & H Riggers & Erectors, Inc. v. OSHRC, 672 F.2d 426, 431 (5th Cir. Unit B 1982) (examines litigation position). Numerous district courts have also examined the government’s litigation position in construing section 2412(d)(1)(A) of the EAJA. See Lauritzen v. Secretary of the Navy, 546 F.Supp. 1221, 1226 & n. 6 (D.Cal.1982); Operating Engineers Local Union No. 3 v. Bohn, 541 F.Supp. 486, 493-96 (D.Utah 1982); Berman v. Schweiker, 531 F.Supp. 1149, 1154 (D.Ill.1982); Alspach v. District Director of Internal Revenue, 527 F.Supp. 225, 228-29 (D.Md.1981); see Papson v. United States, 82-1 USTC (CCH) If 13,466 (Ct.Cl.1982); see also Citizens Coalition for Block Grant Compliance v. City of Euclid, 537 F.Supp. 422, 426 (D.Ohio 1982) (examining only position in litigation because parties settled before court could determine reasonableness of underlying action). But see Moholland v. Schweiker, 546 F.Supp. 383, 386 (D.N.H.1982) (examining underlying action); Wolverton v. Schweiker, 533 F.Supp. 420, 424-25 (D.Idaho 1982) (same); Spencer v. NLRB, 548 F.Supp. 256, 259-65 & n. 14 (D.D.C.1982) (finding substantial justification pursuant to either interpretation); Nunes-Correia v. Haig, 543 F.Supp. 812, 816 (D.D.C.1982) (examining both underlying action and defense position); Photo Data, Inc. v. Sawyer, 533 F.Supp. 348, 352 & n. 7 (D.D.C.1982) (same).
That distinction proves immaterial in many cases when the government’s litigation position is simply that its underlying actions were proper. In such cases there is no difference between the position of the government before and after the lawsuit. Goldhaber v. Foley, 698 F.2d 193, 196 (3d Cir.1983) (distinction only important when government changes its position); Operating Engineers, 541 F.Supp. at 495 (same).1
For example, in Goldhaber the Director of the Administrative Office of the United States had engaged two individuals as reporters for the bankruptcy court. Appellants in Goldhaber were two court reporters who had challenged the AO’s action as beyond his authority and as arbitrary and capricious. The AO had defended by asserting that his action was within his authority and that it was not arbitrary and capricious. In Goldhaber consequently we did not have to decide how to interpret the term “position”. Goldhaber, 698 F.2d at 196.
In this case, however, the distinction is material because EPA did not attempt in litigation to justify its initial action; it contended instead that its subsequent corrective steps either mooted the ease or made the granting of a remedy unnecessary. Examining the statutory language, the purpose of the EAJA, its legislative history, and the cases construing it, I conclude that the term “position” in section 2412(d)(1)(A) is the position taken by the government in litigation.
I note at the outset that the statute itself does not define the term “position.”2 Nor does the legislative history of the EAJA contain an explicit definition. There are several references in the legislative history to government “action” which may be construed to refer to the government’s initial conduct. House Report, supra, at 5, 10, 18. In addition Congress’s purpose in enacting the EAJA was to reduce “economic deter*719rents to contesting governmental action.” Id. at 5-6, U.S.Code Cong. & Admin.News 1980, p. 4984. That purpose lends some support to looking at the government’s underlying action in order to determine substantial justification.3 Reading the legislative history in its entirety, however, I find that Congress’ purpose was to strike a balance between “encouraging parties to vindicate their rights” and not stifling the exercise of “the constitutional obligation of the executive branch to see that the laws are faithfully executed.” House Report, supra, at 10, U.S.Code Cong. & Admin.News 1980, p. 4989. S & H Riggers, 672 F.2d at 429-30.
To achieve that balance, Congress adopted the standard that fees would not be awarded if the “position of the United States was substantially justified.”4 That standard was intended to be an “acceptable middle ground,” House Report, supra at 14, between an automatic award of fees to prevailing plaintiffs and an award only when the government’s position was frivolous or groundless. Id. at 10, 14; S & H Riggers, 672 F.2d at 429; Nunes-Gorreia v. Haig, 543 F.Supp. at 817.
I conclude that interpreting “position” as litigation position best implements that legislative compromise. There is understandable concern that looking at the government’s initial action instead of the reasonableness of the government’s decision to press the issue in court would result in almost automatic fee awards to prevailing plaintiffs in many cases. Operating Engineers, 541 F.Supp. at 495. For example, when reviewing many agency actions, the statutory standard of review is whether the action is “arbitrary or capricious” or whether there is “substantial evidence” on the record to support the action. 5 U.S.C. § 706 (1976). It would be logically difficult to conclude that an action was “arbitrary and capricious” and then to conclude on a motion for fees that the action was “substantially justified.” Operating Engineers, 541 F.Supp. at 495. That difficulty could result in an almost automatic award of fees in such cases, a result clearly not intended by Congress in passing the EAJA.5
Looking at the litigation position to determine substantial justification will still effectuate the purpose of the EAJA to reduce economic deterrents to challenging government action. It will encourage the government to avoid litigation, and correct its actions, a clear intent of the EAJA, House Report, supra, at 10, if it cannot raise reasonable legal arguments. Such action will reduce “the expense of correcting error on the part of the Government.” Senate Report, supra, at 6. However, if the government does waste the resources of the *720prevailing party by raising defenses that have no substantial justification, the EAJA will mandate an award of fees from the government to compensate the party for the expenses incurred. See S & H Riggers, 672 F.2d at 429 (a “fee award is not a sanction to deter or penalize litigation but is a proper allocation of the costs of the litigation”).
In addition to the language addressing the purpose of the EAJA, other language in the legislative history also supports my position.6 First, in explaining the substantial justification standard, the House Report directs the courts to
look closely at cases, for example, where there has been a judgment on the pleadings or where there is a directed verdict, or where a prior suit on the same claim had been dismissed. Such cases clearly raise the possibility that the Government was unreasonable in pursuing the litigation.
The standard, however, should not be read to raise a presumption that the Government position was not substantially justified, simply because it lost the case. Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevailing.
House Report, supra, at 11, U.S.Code Cong. & Admin.News 1980, pp. 4989-4990. (emphasis added).
Second, the House Report instructs that fee awards in judicial proceedings pursuant to section 2412(d)(1)(A) should be treated “analogous to the awards authorized in adversary adjudications” at the agency level under section 203 of the EAJA, 5 U.S.C. § 504(a)(1) (Supp. V 1981). House Report, supra, at 17. Section 203 authorizes the award of fees against the United States in administrative adjudications where the United States is in an adversarial role, unless the “position of the United States is substantially justified.” The legislative history of the substantial justification standard in section 203 states that “[i]ts effect is to place the burden on the government to make a positive showing that its position and actions during the course of the proceedings were substantially justified.... ” House Report, supra, at 13, U.S.Code Cong. & Admin.News 1980, p. 4992 (emphasis added). Such language clearly addresses the government’s post-complaint conduct rather than the government’s pre-complaint conduct.
Therefore in examining a petition for counsel fees pursuant to section 2412(d)(1)(A), I would look at the litigation position of the government in determining whether its position was substantially justified. Rather than demonstrating “hostility” to the legislative intent as Judge Gibbons suggests, 703 F.2d at 707, that approach best comports with the legislative history and with the compromise intended by Congress in enacting the EAJA.
Finally, I turn to the meaning of the term “substantially justified.” The House and Senate Reports define the test as follows:
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. In this regard, the strong deterrents to contesting Government action require that the burden of proof rest with the Government.
*721House Report, supra, at 10, U.S.Code Cong. & Admin.News 1980, p. 4989; Senate Report, supra, at 6. (emphasis added).7
II. Application of the Terms to This Case
Applying the test of substantial justification to EPA’s litigation position in this case, I would hold that EPA’s position was substantially justified. To make that determination I look at the defense position offered by the government to the successful claim of the prevailing party. Goldhaber, 698 F.2d at 196-98. In this case NRDC was successful in its claim that EPA failed to conduct the notice and comment period required by the APA before indefinitely postponing the amendments. Brief for Petitioner at 22; NRDC v. EPA, 683 F.2d at 764.8 EPA argued in response that, as a result of its corrective efforts, no remedy was required and thus the lawsuit was moot. Brief for Respondent at 11, 20.9
This is not a case where the government attempted “with its greater resources and expertise ... [to] coerce compliance with its position.” House Report, supra, at 10, U.S.Code Cong. & Admin.News 1980, p. 4988. As this court noted, this is a case where EPA responded to the lawsuit in a commendable way. NRDC v. EPA, 683 F.2d at 768. It terminated the indefinite postponement, established an effective date for the amendments, and initiated a notice and comment period before any further postponement. After evaluating the comments received, EPA then put all but four of the amendments into effect.
We rejected EPA’s defense that those corrective steps completely removed any harm that its initial postponement may have caused. However, the fact that we rejected EPA’s defense should not “raise a presumption that the Government position was not substantially justified.” House Report, supra, at 11, U.S.Code Cong. & Admin. News 1980, p. 4990; Senate Report, supra, at 7.
EPA’s argument presented a different scenario than that presented to us in Sharon Steel Corp. v. EPA, 597 F.2d 377 (3d Cir.1979). In Sharon Steel EPA dispensed with notice and comment in promulgating a rule. After promulgation the Administrator invited comments and promised to modify the rule if the comments indicated that modification was necessary. Id. at 379. We held that notice and comment after a rule is promulgated is no substitute for pre-promulgation notice and comment as the APA requires. Id. at 381. We concluded that allowing post-promulgation notice and comment as an acceptable substitute would force the petitioner to “come hat-in-hand and run the risk that the decisionmaker is likely to resist change.” Id.
*722In this case, however, EPA argued that notice and comment before further postponement cured any procedural defect in the failure to provide notice and comment before initial postponement. Unlike the situation in Sharon Steel, EPA argued that its corrective steps had recreated the same situation as that which existed at the time of initial postponement. By establishing an effective date for the amendments, EPA had committed itself to putting the amendments into effect absent affirmative action to the contrary. EPA contended that its steps allowed NRDC to make the same arguments against postponement as NRDC could have made initially, without our concern in Sharon Steel that “the decisionmaker [would be] likely to resist change.” Sharon Steel, 597 F.2d at 381.
Although we ultimately rejected EPA’s defense as “circumventpng] Sharon Steel and the APA,” NRDC v. EPA, 683 F.2d at 768, I nonetheless find that it was reasonable for EPA to have pressed that position in court.10 See S & H Riggers, 672 F.2d at 431 (no fees where government raises “novel but credible extensions or interpretations of the law”) (quoting House Report, supra, at 11).
I conclude that EPA’s defense position was “reasonable both in law and fact.” I accordingly conclude that EPA has met its burden of showing that its “position” was “substantially justified” within the meaning of section 2412(d)(1)(A). I therefore would deny NRDC’s petition for counsel fees and expenses.11

. There is another situation where the distinction is immaterial. The EAJA contemplates situations where a party challenges unreasonable government action as the plaintiff in a case, but also situations where a party defends against unreasonable government enforcement efforts. In the latter cases, the government is in the position of the plaintiff and the government “action” is its litigation position. Alspach, 527 F.Supp. at 228; see, e.g., Wyandotte Savings Bank v. NLRB, 682 F.2d 119 (6th Cir. 1982) (per curiam) (NLRB enforcement proceeding), Donovan v. Dillingham, 668 F.2d 1196 (11th Cir.1982), reh’g. en banc granted, 668 F.2d at 1199 (ERISA enforcement proceeding).

. Judge Gibbons makes much of the Act’s definition of “United States.” 703 F.2d at 706-707. To me that definition merely recognizes the obvious — that the government as an entity can only take a “position,” whatever the meaning of that term, through its agencies and the individuals who administer its agencies.

. See Moholland v. Schweiker, 546 F.Supp. at 386 (given the purpose of the EAJA, a fee award should not depend on “the potential that the government might not comport itself with proper adversarial etiquette”).

. I note that Congress took the “substantial justification” standard directly from Fed.R. Civ.P. 37(a)(4). House Report, supra, at 13, 18. That rule allows the court to award costs and attorney’s fees against the party opposing a motion to compel discovery “unless the court finds that the opposition to the motion was substantially justified.” Fed.R.Civ.P. 37(a)(4) (emphasis added). The Notes of the Advisory Committee on Rules explain the language further, stating that the rule “provides in effect that expenses should ordinarily be awarded unless a court finds that the losing party acted justiñably in carrying his point to court.” Fed. R.Civ.P. 37 advisory committee notes, (emphasis added). The language of Rule 37 clearly addresses the losing party’s litigation position.
In Goldhaber, 698 F.2d at 197 n. 5, we recognized the parallel between Rule 37 and the EAJA and consequently borrowed the apportionment provision from Rule 37 for EAJA purposes. Although the purposes of Rule 37 and the EAJA are not identical, Operating Engineers, 541 F.Supp. at 494, the meaning of the language in Rule 37 nonetheless gives some indication of what Congress meant when it adopted that same language in the EAJA.

. The court in Wolverton v. Schweiker, 533 F.Supp. 420, 425 & n. 14 (D.Idaho 1982) attempted to solve the problem in “substantial evidence” cases. There the court awarded fees under the EAJA because there was no evidence to support an agency position. The court recognized that such cases where there was no evidence to support an agency decision would be rare. Id. at 425 n. 14. As the court in Operating Engineers noted, however, such an approach does nothing to solve the problem in “arbitrary and capricious” cases. Operating Engineers, 541 F.Supp. at 495.

. Judge Gibbons boldly asserts that “[t]here is not a scintilla of legislative history,” 703 F.2d at 710 to support the view that the term “position” refers to the government’s litigation position. He states that there are “overwhelming references” to the contrary. Id. Most of those “overwhelming references”, however, are merely bits and pieces of conversations on the floor and are not specifically addressed to the language of the EAJA here at issue. The specific language of the House and Senate Reports hardly provides “overwhelming” support for Judge Gibbons’ interpretation. Indeed my reading of the House and Senate reports leads me to a different conclusion.

. Not wishing to quibble with the language that the test is “essentially one of reasonableness,” I nonetheless note that the test appears to be slightly above reasonableness. The Senate Judiciary Committee refused to lighten the government’s burden by refusing to change the language of the bill from “substantially justified” to “reasonably justified.” Senate Report, supra, at 8; see Wolverton v. Schweiker, 533 F.Supp. at 424.

. NRDC raised two other challenges to EPA’s action in postponing the amendments. It alleged that EPA gave inadequate reasons for the postponement. Brief of Petitioner at 28. NRDC also alleged that EPA failed to disclose ex parte communications received from parties affected by the regulations. Brief of Petitioner at 33. We did not address those allegations on the merits; necessarily NRDC was not “successful” on those challenges. I therefore have no occasion to consider whether EPA’s defenses to those challenges were substantially justified. See Goldhaber, 698 F.2d at 196-98.

. Intervenors, but not EPA, argued that EPA was not required to conduct a notice and comment period before the initial postponement. Although EPA did not specifically disavow those arguments, they were in no way a part of EPA’s defense posture. Respondent’s Rebuttal to NRDC’s Reply Mémorandum on Attorneys’ Fees at 7-8. The EAJA instructs the court to look only to the “position of the United States,” and I therefore do not consider the substantial justification of intervenors’ arguments.
NRDC suggests that EPA should have conceded the illegality of its underlying action in making its mootness defense. Reply Memorandum at 11 n. 11. Such a concession, however, would not have lessened NRDC’s litigation burden because NRDC still would have had to answer the arguments raised by the intervenors.

. We indicated that we might have accepted EPA’s mootness defense but for the postponement of the four amendments after the October 13 notice and comment period. NRDC v. EPA, 683 F.2d at 759 n. 15.

. Because I would deny a fee award in this case, I do not consider the issues which Judge Gibbons addresses in Part III(D) of his opinion.