Shafer v. United States

In the United States Court of Federal Claims

No. 13-889C

Filed December 8, 2015

NOT FOR PUBLICATION

)

ALAN SHAFER, )

)

Plaintiff, )

Equal Access to Justice Act, 28 U.S.C.

)

§ 2412.

v. )

)

THE UNITED STATES, )

)

Defendant. )

)

William S. Aramony, Alexandria, VA, for plaintiff.

Elizabeth Anne Speck, Trial Attorney, Steven J. Gillingham, Assistant Director, Robert E.

Kirschman, Jr., Director, Benjamin C. Mizer, Principal Deputy Assistant Attorney General,

Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington,

DC, for defendant.

MEMORANDUM OPINION AND ORDER

GRIGGSBY, Judge

INTRODUCTION

Before the Court is plaintiff's motion for attorneys' fees pursuant to the Equal Access to

Justice Act (“EAJA”), 28 U.S.C. § 2412. The government opposes an award of attorneys' fees

and expenses, arguing that plaintiff is not a prevailing party and that the government’s position in

the underlying litigation was substantially justified. For the reasons set forth below, the Court

DENIES plaintiff’s motion for an award of attorneys’ fees.

FACTUAL AND PROCEDURAL BACKGROUND1

A. Factual Background

The relevant facts of this case are undisputed. Plaintiff, Alan Shafer, is a retired

Lieutenant Colonel who served honorably with the United States Air Force (“Air Force”) for

more than 30 years. Compl. at ¶ 2. While training to deploy to Afghanistan, plaintiff injured his

right knee. Compl. at ¶ 4; Pl. Rep. at Ex. 3. On December 3, 2008, plaintiff applied for length

of service retirement from the Air Force under 10 U.S.C. § 8918. Compl. at ¶ 5; Pl Memo. at Ex.

2; Pl. Rep. at Ex. 3; see also 10 U.S.C. § 8918. On April 17, 2009, the Air Force denied

plaintiff’s application for length of service retirement. Compl. at ¶ 6. Thereafter, on August 29,

2009, plaintiff was honorably discharged from the Air Force and placed on disability retirement,

pursuant to 10 U.S.C. § 1201(a). Compl. at ¶¶ 7-8, Ex. B; 10 U.S.C. § 1201(a)2.

On July 27, 2010, plaintiff filed an application for the correction of military records

before the Air Force Board for Correction of Military Records (“AFBCMR”) in an attempt to

obtain length of service retirement pay pursuant to 10 U.S.C. § 1409(b). Compl. at ¶ 10, Ex. A;

Def. Mot. at 2; Pl. Resp. at Ex. 3. On December 19, 2011, the AFBCMR denied plaintiff’s

application, finding no error or injustice. Compl. at ¶ 19, Ex. B, Ex. C; Pl. Resp. at Ex. 3; 10

U.S.C. § 1552.

On November 8, 2013, plaintiff filed the complaint in this matter challenging the

AFBCMR’s decision. See generally Compl. In the complaint, plaintiff contends that he was

entitled to receive length of service retirement pay calculated using the multiplier for regular

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The facts recounted in this Memorandum Opinion and Order are taken from the complaint (“Compl. at

___”), defendant’s unopposed motion to remand (“Def. Mot. to Remand”), defendant’s motion to dismiss

and the appendix attached thereto (“Def. Mot. at __” and “Def. App. at __”), plaintiff’s response and

opposition to defendant’s motion to dismiss (Pl. Opp. at __”), defendant’s reply brief and the exhibits

attached thereto (“Def. Rep. at __”), plaintiff’s motion for attorneys’ fees and the memorandum in support

of his motion for attorneys’ fees (“Pl. Mot. at _” and “Pl. Memo. at _”), defendant’s response to the

motion for attorneys’ fees (“Def. Opp. at _”), and plaintiff’s reply in support of his motion for attorneys’

fees (“Pl. Rep. at _”).

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Because the Air Force placed plaintiff on disability retirement, plaintiff’s retirement pay had been

capped at 75% of his base pay. Compl. at ¶ 7; 10 U.S.C. § 1401(a). Under a length of service retirement,

plaintiff is eligible to receive approximately 79% of his base pay under 10 U.S.C. § 1409(b). Compl. at ¶

7; see also 10 U.S.C. § 1409(a)(1)(A).

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service non-disability retirement found in 10 U.S.C. § 1409(b), pursuant to 10 U.S.C. § 1401(b).

Compl. at ¶¶ 17-18. Section 1401(b) provides, in pertinent part, that “[i]f a person would

otherwise be entitled to retired pay computed under more than one formula of the table in

subsection (a) or of any other provision of law, the person is entitled to be paid under the

applicable formula that is most favorable to him.” 10 U.S.C. § 1401(b).

On February 25, 2014, defendant filed a motion, on behalf of both parties, to stay and

remand this matter to the AFBCMR. Def. Mot. to Remand. In that motion, the parties requested

a remand to the AFBCMR because the administrative record did “not clearly document the

AFBCMR’s conclusion regarding the central issue of this case, what level of retirement pay

plaintiff was entitled to pursuant to 10 U.S.C. § 1401(b).” Id. On March 5, 2014, the Court

granted defendant’s motion for a remand to the AFBCMR and stayed the case during the

remand. See Order to Stay and Remand. The Court’s Remand Order states in pertinent part

that:

On February 25, 2014, defendant filed a motion requesting the court to remand this

matter to the Air Force Board for Correction of Military Records (AFBCMR).

Plaintiff joins this request. Consistent with defendant’s motion, the court hereby

orders the following: . . . This case is REMANDED to the AFBCMR, for a period

not to exceed six months, to consider: (i) plaintiff’s claim that the AFBCMR failed

to apply 10 U.S.C. § 1401(b) to his retirement application; (ii) any other matters

that plaintiff presents in writing to the AFBCMR regarding his retirement within

30 days of this remand order.

Order to Stay and Remand. The Court’s Remand Order took no position on the merits of

plaintiff’s claim. Id. Additionally, the matters that the Court directed the AFBCMR to consider

during the remand proceedings were requested by the parties in defendant’s remand motion. See

Def. Mot. to Remand.

During the remand before the AFBCMR, plaintiff argued that he was eligible for length

of service retirement under 10 U.S.C. § 8918, that the statutory provision for calculating regular

service non-disability retirement pay found in 10 U.S.C. § 1409(a)(1)(A) did not preclude

plaintiff from receiving length of service retirement pay, and that he should not be penalized with

lower retirement pay due to his disability. Pl. Rep. at Ex. 3. On November 26, 2014, the

AFBCMR issued an opinion stating that, “we are not convinced that the applicant’s retired pay

was calculated improperly.” Def. App. at 6. But, the AFBCMR, nonetheless, changed plaintiff’s

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retirement pay status to a length of service retirement pursuant to its authority to grant relief in

the interest of justice. See Def. App. at 1-7; 10 U.S.C. § 1409.

Specifically, in the opinion, the AFBCMR adopted a legal decision issued by the Air

Force Office of the Judge Advocate General, Administrative Law Directorate (“AF/JAA”)

finding that service members retired under 10 U.S.C. § 1201(a) “may not have their retired pay

calculated” using the higher multiplier found in § 1409(b), “through §1401(b)’s most favorable

formula provision, as it is specifically prohibited by §1409(a)(1)(A).” Pl. Rep. at Ex. 2; see also

Def. App. at 6. The AFBCMR concluded, however, that pursuant to its authority to “remove an

injustice”, plaintiff’s records should be corrected to reflect that he retired under length of service

retirement rules rather than for physical disability. Def. App. at 6-7; 10 U.S.C. § 1552.

Specifically, the AFBCMR found “it reasonable to conclude that had the applicant clearly

understood that the implications of choosing a disability retirement over a length of service

retirement would have resulted in a reduced retired pay multiplier, he would have likely elected

to discontinue his processing under the disability evaluation system (DES) and apply for a length

of service retirement.” Def. App. at 6. And so, the AFBCMR corrected plaintiff’s military

records to rescind his disability retirement and change plaintiff’s retirement status to length of

service retirement. Def. App. at 8-9; 11-19.

In light of the AFBCMR’s decision, the government moved to dismiss this matter as

moot on February 27, 2015. See Def. Mot. The Court subsequently dismissed the complaint on

July 13, 2015. See Memorandum Opinion and Order; Judgment. On August 7, 2015, plaintiff

filed a timely motion for attorneys’ fees and related expenses pursuant to EAJA. See Pl. Mot.

Defendant opposes plaintiff’s motion. See generally Def. Opp.

B. Procedural Background

Plaintiff filed the complaint in this matter on November 8, 2013. See generally Compl.

On February 25, 2014, defendant filed a motion on behalf of both parties to remand the matter

to the AFBCMR. See Def. Mot. to Remand. On March 5, 2014, the Court stayed and

remanded this case to the AFBCMR. See Order to Stay and Remand. The government filed a

status report notifying the Court of the AFBCMR’s decision on January 5, 2015. Status Report,

Jan. 5, 2015.

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On February 27, 2015, the government moved to dismiss plaintiff’s complaint as moot

because, “the Air Force afforded Mr. Shafer all of the relief he requested.” Def. Mot. at 4. On

March 29, 2015, plaintiff filed a response to the government’s motion. See generally Pl. Opp.

On June 22, 2015, the government filed its reply. See generally Def. Reply. On July 13, 2015,

the Court dismissed plaintiff’s complaint as moot. See generally Order, dated July 13, 2015.

On August 7, 2015, plaintiff timely filed a motion for attorneys’ fees and a

memorandum of law in support of plaintiff’s motion for attorneys’ fees pursuant to EAJA. See

Pl. Mot.; RCFC 54(d)(2)(B). On September 8, 2015, defendant filed a response and opposition

to plaintiff’s motion. See Def. Opp. On September 22, 2015, plaintiff filed a reply in support

of his motion for attorneys’ fees. See Pl. Rep. The matter having been fully briefed, the Court

addresses the pending motion for attorneys’ fees.

LEGAL STANDARDS

A. EAJA

The Equal Access to Justice Act (“EAJA”) sets forth the circumstances under which a

party may recoup attorneys’ fees, costs and certain other litigation expenses from the United

States. 28 U.S.C. § 2412(a), (d). EAJA is a “fee-shifting” statute. Hubbard v. United States,

480 F.3d 1327, 1333 (Fed. Cir. 2007). Congress enacted EAJA “‘to eliminate the barriers that

prohibit small businesses and individuals from securing vindication of their rights in civil actions

and administrative proceedings brought by or against the Federal Government.’” Scarborough v.

Principi, 541 U.S. 401, 406 (2004) (quoting H. R. Rep. No. 96–1005, at 9 (1980)).

The United States Supreme Court has held that a party may recover attorneys’ fees and

costs under EAJA if: (1) the party’s application is submitted to the court within 30 days of final

judgment in the action and is supported by an itemized statement; (2) the applicant’s net worth

does “not exceed $2,000,000 at the time the civil action was filed”; (3) the applicant is a

“prevailing party in any civil action brought by or against the United States . . . .”; (4) the

government's position was not “substantially justified”; and (5) no “special circumstances make

an award unjust.” 28 U.S.C. § 2412; see also Comm'r, Immigration & Naturalization Serv. v.

Jean, 496 U.S. 154, 158 (1990); Libas, Ltd. v. United States, 314 F.3d 1362, 1365 (Fed. Cir.

2003).

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In this regard, “[t]he EAJA applicant has the burden of proving he is a prevailing party.”

Davis v. Nicholson, 475 F.3d 1360, 1366 (Fed. Cir. 2007) (citing RAMCOR Servs. Grp. v. United

States, 185 F.3d 1286, 1288 (Fed. Cir. 1999)). The United States Court of Appeals for the

Federal Circuit has also held that, “where the plaintiff secures a remand requiring further agency

proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party. . .

when successful in the remand proceedings where there has been a retention of jurisdiction.”

Former Employees of Motorola Ceramic Products v. United States, 336 F.3d 1360, 1366 (Fed.

Cir. 2003).

In addition, the government bears the burden of proving its litigating position in the

controversy was “substantially justified.” Libas, 314 F.3d at 1365 (citations omitted). To satisfy

this burden, the government's position must have “had a ‘reasonable basis in law and fact.’”

RAMCOR, 185 F.3d at 1290 (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988)).

To determine whether the government's position was substantially justified, the trial court

must “‘look at the entirety of the government's conduct. . . .’” Id. (quoting Chiu v. United States,

948 F.2d 711, 715 (Fed. Cir. 1991)). The government must also demonstrate that it was “‘clearly

reasonable in asserting its position, including its position at the agency level, in view of the law

and the facts.’” Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States, 837

F.2d 465, 466 (Fed. Cir. 1988) (quoting Gavette v. Office of Pers. Mgmt., 808 F.2d 1456, 1467

(Fed. Cir. 1986)); see also Blakley v. United States, 593 F.3d 1337, 1341 (Fed. Cir. 2010). And

so, the government's position may be substantially justified even if it is ultimately incorrect.

Manno v. United States, 48 Fed. Cl. 587, 589 (2001); see also Pierce, 487 U.S. at 561 (holding

the appropriate inquiry is “not what the law now is, but what the [g]overnment was substantially

justified in believing it to have been.”). In addition, the plaintiff bears the burden of proving the

additional requirements under EAJA. Al Ghanim Combined Grp. Co. v. United States, 67 Fed.

Cl. 494, 496 (2005).

LEGAL ANALYSIS

A. Plaintiff Is Not A Prevailing Party

In his motion, plaintiff seeks an award of attorneys’ fees and other costs and expenses

pursuant to the Equal Access to Justice Act. See generally Pl. Mot. The government opposes

plaintiff’s motion upon two grounds. Def. Opp. at 6-10. First, the government argues that

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plaintiff is not a prevailing party in this case, because the Court did not remand the case to the

AFBCMR to address an administrative agency error and plaintiff did not achieve success before

the agency. Def. Opp. at 6-8. Second, the government argues that its position in this litigation

was substantially justified because the AFBCMR found no agency error. Id. at 8-10. In the

alternative, the government argues that, should the Court determine that plaintiff is entitled to

attorneys’ fees, the Court should reduce the amount of those fees because plaintiff’s attorney is

not entitled to enhanced fees and the Air Force committed no error. Id. at 10-12.

For the reasons discussed below, the Court must deny plaintiff’s motion because plaintiff

has not shown that he was a prevailing party and the government’s position in this litigation was

substantially justified.

1. The Court Did Not Remand The Case Due To Agency Error

As an initial matter, plaintiff is not a prevailing party in this matter because the remand of

this case to the AFBCMR was not due to agency error. In Former Employees of Motorola, the

United States Court of Appeals for the Federal Circuit held that, “where the plaintiff secures a

remand requiring further agency proceedings because of an alleged error, the plaintiff qualifies

as a prevailing party . . . when successful in the remand proceedings where there has been a

retention of jurisdiction.” Former Employees of Motorola, 336 F.3d at 1366 (emphasis

supplied). The general rule is that, if the Court issuing the remand order does not identify or

acknowledge an error by the administrative agency, and there has not been a “concession of such

error by the agency”, the remand is procedural in nature and does not convey prevailing party

status upon the claimant. Davis, 475 F.3d at 1366; see also Thompson v. Shinseki, 682 F.3d

1377, 1382 (Fed. Cir. 2012) (stating that only remands based on “actual or perceived

administrative error” convey prevailing party status for EAJA purposes) (citing Davis, 475 F.3d

at 1364); Ward v. U.S. Postal Serv., 672 F.3d 1294, 1299 (Fed. Cir. 2012) (stating that “remands

not rooted in agency error do not result in prevailing party status” under EAJA); Gurley v. Peake,

528 F.3d 1322, 1328 (Fed. Cir. 2008) (holding that a remand for “judicial economy rather than

administrative error” does not convey prevailing party status).

In determining whether a remand is based upon agency error here, this Court has long

recognized that a remand predicated upon agreement of the parties “does not bar a finding of

prevailing party status.” Gurley, 528 F.3d at 1328. Additionally, the Court may look to the

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“context of the full record” to determine whether there has been administrative error. Martinez

v. United States, 94 Fed. Cl. 176, 182 (2010) (citing Davis, 475 F.3d at 1365).

The undisputed facts in this case make clear that plaintiff did not secure a remand

because of an alleged agency error. See Def. Mot. to Remand; Order to Stay and Remand. The

Court’s Remand Order granted a joint request from the parties to remand the case to the

AFBCMR and to stay the case during the remand. See Order to Stay and Remand. The Court’s

Remand Order states in pertinent part that:

This case is REMANDED to the AFBCMR, for a period not to exceed six months, to

consider: (i) plaintiff’s claim that the AFBCMR failed to apply 10 U.S.C. § 1401(b) to

his retirement application; (ii) any other matters that plaintiff presents in writing to the

AFBCMR regarding his retirement within 30 days of this remand order; . . . .

Id. The Court’s Remand Order took no position on the merits of plaintiff’s claim. Id. Nor did

the Remand Order find any error on the part of the Air Force. Id. Rather, the Court’s Remand

Order was purely procedural. See Akers v. Nicholson, 409 F.3d 1356, 1359 (Fed. Cir. 2005). It

is well established that such a procedural remand does not confer prevailing party status on an

EAJA claimant. Id. (holding when the parties agreed to a procedural remand, the remand merely

provided the opportunity for further adjudication and, thus, did not confer prevailing party status

on claimants) (citing Vaughn, 336 F.3d at 1356). And so, the Court’s Remand Order did not

confer prevailing party status upon plaintiff in this case. See 28 U.S.C. § 2412.

The Air Force also did not concede any administrative error during the remand

proceedings. Def. App. at 6-7. During the remand proceedings, the AFBCMR adopted the Air

Force’s findings that plaintiff was not eligible to have his “retired pay calculated under 10 U.S.C.

§1409 through §1401(b)’s most favorable formula provision. . . .” Pl. Rep. at Ex. 2; Def. App. at

6. Specifically, the AFBCMR determined that it was “not convinced that the applicant’s retired

pay was calculated improperly.” Def. App. at 6. Additionally, the AFBCMR held that:

We therefore accept the recommendations provided by AF/JAA and adopt its

rationale as the basis for our conclusion that the applicant’s military retired pay was

computed appropriately in accordance with the governing statutes and Air Force

policy.

Id. And so, the undisputed facts in this matter show that neither the agency, nor the Court,

identified or conceded any error with respect to the Air Force’s decision on plaintiff’s retirement

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status. See Order to Stay and Remand; Def. App. at 6-7. Given this, plaintiff cannot be a

prevailing party as contemplated by the EAJA statute. 28 U.S.C. § 2412; Former Employees of

Motorola, 336 F.3d at 1366.

2. Plaintiff Did Not Succeed On The Merits Before The AFBCMR

Because plaintiff has not shown that the remand of this case was because of an alleged

agency error, he has not met his burden to establish that he is a prevailing party. Nonetheless,

the undisputed facts also show that plaintiff was not successful before the agency.

In this regard, it is undisputed that plaintiff has received all of the relief that he requested

during the remand proceedings. Def. Mot.; Pl. Memo. at 2-3. The AFBCMR has changed

plaintiff’s retirement status to length of service retirement and corrected plaintiff’s military

records to reflect this retirement status. Def. Mot. at 3-4; Def. App. at 6-21. In addition, plaintiff

is currently receiving length of service retirement pay. Def. App. at 9, 11-18, 20-21; Def. Rep. at

2.

But, it is also undisputed that the AFBCMR awarded this relief based upon its authority

to grant relief to remove an injustice, rather than by a finding of error. Def. App. at 6-7; 10

U.S.C. § 1552. Specifically, during the remand proceedings, the AFBCMR held that if plaintiff

had understood the “implications of choosing a disability retirement over a length of service

retirement. . . he would have likely elected to discontinue his” disability retirement processing

and applied for length of service retirement. Def. App. at 6. And so, the AFBCMR determined

that it would correct plaintiff’s military record, and change his retirement status to length of

service retirement from disability retirement, “in the interest of justice.” Id. In doing so, the

AFBCMR specifically held that there was no agency error in this case. Def. App. at 6-7 (“the

applicant’s military retired pay was computed appropriately”); see also Compl. at Ex. B (“The

Board determines that: [t]he applicant be notified the evidence presented did not demonstrate the

existence of material error. . . .”).

This Court has long recognized that a party does not “succeed before the agency” when

the “lawsuit brought about a voluntary change in the defendant’s conduct.” Akers, 409 F.3d at

1358 (citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532

U.S. 598, 601 (2001) (rejecting the “catalyst theory”)); see also Brickwood Contractors, Inc. v.

United States, 288 F.3d 1371, 1379 (Fed. Cir. 2002) (applying the Buckhannon analysis to EAJA

cases). Rather, plaintiff must obtain “some relief or success on a significant issue in the

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litigation, such as an “enforceable judgment[ ] on the merits or [ ] a court-ordered consent

decree.” Buckhannon, 532 U.S. at 604 (citing Tx. State Teachers Ass'n, 489 U.S. at 792-93); see

also Rice Services, Ltd. v. United States, 405 F.3d 1017, 1025 (Fed. Cir. 2005) (“[I]n order to

demonstrate that it is a ‘prevailing party,’ an EAJA applicant must show that it obtained an

enforceable judgment on the merits or a court-ordered consent decree that materially altered the

legal relationship between the parties, or the equivalent of either of those.”) (citations omitted).

The outcome of the remand proceedings here is analogous to other circumstances where the

government has voluntarily changed its position after the commencement of litigation. It is well

established that plaintiff is not entitled to an award of attorneys’ fees under EAJA under such

circumstances. Akers, 409 F.3d at 1358. And so, plaintiff may not receive attorneys’ fees and

other costs under EAJA.

B. The Government’s Position Was Substantially Justified

Although the Court concludes that plaintiff is not a prevailing party for EAJA purposes−

and that he cannot recover attorneys’ fees under EAJA− the Court also briefly addresses the

issue of whether the government's litigation position in this matter was substantially justified3.

It is well established that the government bears the burden of proving its position was

substantially justified. See White v. Nicholson, 412 F.3d 1314, 1316 (Fed. Cir. 2005);

Hillensbeck v. United States, 74 Fed. Cl. 477, 479–80 (2006); Al Ghanim Combined Grp. Co., 67

Fed. Cl. at 496. The United States Supreme Court has also held that “substantially justified”

means “‘justified in substance or in the main’–that is justified to a degree that could satisfy a

reasonable person.” Pierce, 487 U.S. at 565. In this regard, “trial courts are instructed to look at

the entirety of the government’s conduct and make a judgment call [about] whether the

government’s overall position had a reasonable basis in both law and fact.” Chiu, 948 F.2d at

715.

The government’s position during the course of the litigation has been that the Air Force

properly determined that plaintiff was not entitled to length of service retirement pay under 10

U.S.C. § 1409(b). Def. App. at 6; Def. Opp. at 8-9. The AFBCMR agreed with this position

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The Court notes that this litigation terminated before the Court could reach the merits of plaintiff's

claims. Nothing in this Memorandum Opinion and Order should be construed as the Court taking a

position on the merits of plaintiff's claims.

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during the remand proceedings. Def. App. at 6. In fact, while the AFBCMR ultimately awarded

plaintiff relief, it did so without finding any error with respect to the government’s litigation

position. Def. App. at 6-7. Given this, the undisputed facts in this case show that, overall, the

government’s position had a reasonable basis in law and fact. Chiu, 948 F.2d at 715. And so,

the government has demonstrated that its position during this litigation was “justified to a degree

that could satisfy the reasonable person.” Pierce, 487 U.S. at 564–65.

CONCLUSION

In sum, the undisputed facts in this matter demonstrate that plaintiff has not met his

burden to show that he is a prevailing party in order to obtain an award of fees under the Equal

Access to Justice Act. Plaintiff has not demonstrated that this case has been remanded to the

AFBCMR based upon an administrative agency error, nor has he shown that he succeeded before

the agency. In addition, the government has shown that its litigation position in the case was

substantially justified. For these reasons, plaintiff is not entitled to an award of attorneys’ fees

and other costs and expenses pursuant to the Equal Access to Justice Act.

For the foregoing reasons, the Court DENIES the plaintiff’s motion for attorneys’ fees.

The Clerk’s Office is directed to enter judgment in favor of defendant.

Each party to bear its own costs.

IT IS SO ORDERED.

s/ Lydia Kay Griggsby

LYDIA KAY GRIGGSBY

Judge

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