Equal Access to Justice Act
In the United States of America, the Equal Access to Justice Act, first passed in 1980, authorizes the payment of attorney's fees to a prevailing party in an action against the United States absent a showing by the government that its position in the underlying litigation "was substantially justified". The Act is codified in scattered sections of the United States Code:
- provides that an agency that conducts an adversary adjudication against a prevailing party shall pay the fees and expenses of the party, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified. "Adversary adjudication" is defined as a formal trial-type ex parte proceeding in which the agency is adverse to the party, and governed by 5 U. S. C. § 554 "trial type" proceedings, as opposed to an inter partes proceeding in which the agency adjudicates a dispute between two parties, or the less-formal proceedings of § 555.
- provides that the agency shall pay attorney fees of a prevailing party in a court case against the agency, unless the court finds that the agency position was substantially justified.
- a short time deadline after the favorable final judgment, including a statement of "the amount sought, including an itemized statement from any attorney... stating the actual time expended and the rate" charged.
- a showing that the applicant is a "prevailing party"
- a showing that the applicant is "eligible to receive an award"
- a limit on the net worth of the party
- an allegation that "the position of the United States was not substantially justified".
Time for filing
An applicant for attorney's fees under the EAJA must file an application within thirty days of the final judgment in the civil action. However, an EAJA application may be filed until thirty days after a judgment becomes “final and not appealable”. In some instances when an agency of the United States is a party in this case, a notice of appeal may be filed within 60 days of entry of the judgment. See, where the Supreme Court ruled that the filing period starts to accrue only after the time to appeal has expired for all parties.Net worth
A party must meet the threshold requirement of having a net worth not in excess of $7,000,000 for any owner of an unincorporated business, or any partnership, corporation, association, unit of local government, or organization. Or, $2,000,000 at the time the action was filed for an individual. .Substantial Justification and Special Circumstances
The court must determine whether “the position of the United States was substantially justified or... special circumstances make an award unjust.” The government has the burden of proving its action is substantially justified or that circumstances make an award of attorney's fees unjust. citing ; id., at 575 ; Davidson v. Veneman, 317 F. 3d 503, 506 ; Lauer v. Barnhart, 321 F. 3d 762, 764 ; Libas, Ltd. v. United States, 314 F. 3d 1362, 1365. See also H. R. Rep. No. 96-1005, at 10.In, the Supreme Court held that the position of the United States is substantially justified if it is “justified in substance or in the main--that is, justified to a degree that could satisfy a reasonable person." . The Court provided further guidance on this standard, noting, "... position can be substantially justified even though it is not correct, and we believe that it can be substantially justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact." Id. at 566 n.2.
The United States Court of Appeals for the Seventh Circuit has described the substantial justification standard as requiring that the government show that its position was grounded in "' a reasonable basis in truth for the facts alleged; a reasonable basis in law for the theory propounded; and a reasonable connection between the facts alleged and the legal theory advanced.'" United States v. Hallmark Constr. Co., 200 F.3d 1076, 1080 quoting Phil Smidt & Son, Inc. v. NLRB, 810 F.2d 638, 642 quoting Donovan v. DialAmerica Mkting, Inc., 757 F.2d 1376, 1389. Furthermore, some courts have held the “court only needs to find one reason for finding the ALJ was not substantially justified in order to allow EAJA fees...” Mallette v. Sullivan, 1990 WL 19894, *3-*5.
Congress's inclusion in the EAJA of the substantial justification standard manifests its intent not to permit a prevailing party to automatically recover fees. See ''Federal Election Comm'n v. Rose, 806 F.2d 1081, 1087. As the Cummings court observed, these two standards of review “are used at different stages and involve different tests.” Cummings v. Sullivan, 950 F.2d 492, 498. A court at the EAJA stage must take a fresh look at the case from an EAJA perspective, and reach a judgment independent from the ultimate merits decision. Rose, 806 F.2d at 1087–90. Thus, the government's position may be substantially justified even if its decision was not supported by substantial evidence.
, the Supreme Court held that the government's position is substantially justified if it is “justified to a degree that could satisfy a reasonable person,” that is, “if it has a reasonable basis in law and fact.” Id. at 565-66 & n.2. The Court rejected the position that substantial justification requires more than mere reasonableness. Id. 487 U.S. at 567–68. See also Brouwers v. Bowen, 823 F.2d 273, 275 .
“Substantially justified” does not mean “justified to a high degree,” but rather has been said to be satisfied if there is a “genuine dispute,” or if reasonable people could differ as to the appropriateness of the contested action. Stein v. Sullivan, 966 F.2d 317, 320 . Thus, a loss on the merits does not equate with a lack of substantial justification. See ; United States v. Hallmark Construction Co., 200 F.3d 1076, 1080. Thus, a court's statement in its merits decision that a government agency did not have a “rational ground” for denying benefits does not imply a lack of substantial justification for the agency's position. Kolman v. Shalala'', 39 F.3d 173, 177. As the Seventh Circuit explained in Kolman, its statement that the agency did not have a rational ground for its decision was a reference to the test for invalidating agency action; at the EAJA stage, the test is “whether the agency had a rational ground for thinking it had a rational ground for its action.” Kolman, 39 F.3d at 177.