Pierce v. Underwood

Justice White,

with whom Justice O’Connor joins, concurring in part and dissenting in part.

I agree with the majority’s interpretation of the term “substantially justified” as used- In the Equal Access to Justice Act (EAJA), 28 U. S. C. § 2412 (d). However,, because I believe that a district court’s assessment of whether the Government’s legal position was substantially justified should be reviewed de novo and that the attorney’s fees award in this case could not be sustained under that standard of review, I dissent from Parts II and IV of the majority’s opinion.

I-*

The majority acknowledges that neither the language nor the structure of the EAJA “compel[s]” deferential review of a district court’s determination of whether the Government’s position was substantially justified. Ante, at 559. In fact, the statute is wholly silent as to the standard under which *584 such determinations are to be reviewed. 1 This congressional silence in the face of both the general rule of de novo review of legal issues and the EAJA’s special purpose of encouraging meritorious suits against the Government suggests a different result than that reached by the majority.

The Congress that adopted the EAJA certainly was aware of the general rule that issues of law are reviewed de novo while issues of fact are reviewed only for clear error. See Fed. Rule Civ. Proc. 52(a); Pullman-Standard v. Swint, 456 U. S. 273, 287 (1982). Congress would have known that whether or not a particular legal position was substantially justified is a question of law rather than of fact. The historical facts having been established, the question is to be resolved by the legal analysis of the relevant statutory and decisional authorities that appellate courts are expected to perform. As the District of Columbia Circuit has observed, “the special expertise and experience of appellate courts in assessing the relative force of competing interpretations and applications of legal norms makes the case for de novo review of judgments [of whether the Government’s legal position was substantially justified] even stronger than the case for such review of paradigmatic conclusions of law.’’ Spencer v. NLRB, 229 U. S. App. D. C. 225, 249, 712 F. 2d 539, 563 (1983), cert. denied, 466 U. S. 936 (1984). It is thus most likely that Congress expected that the courts of appeals would apply the same de novo standard of review to a district *585 court’s assessment of whether the Government’s interpretation of the law was substantially justified for purposes of the EAJA as they would apply to a district court’s assessment of whether the Government’s interpretation of the law was correct in the underlying litigation.

De novo appellate review of whether the Government’s legal position was substantially justified would also foster consistency and predictability in EAJA litigation. A court of appeals may be required under the majority’s “abuse of discretion” standard to affirm one district court’s holding that the Government’s legal position was substantially justified and another district court’s- holding that the same position was not substantially justified. As long as the district court’s opinion about the substantiality of the Government case rests on some defensible- construction and application of the statute, the Court’s view.would command the court of appeals to defer even though that court’s own view on the legal issue is quite different. The availability of attorney’s fees would not only be difficult to-predict but would vary from circuit to circuit- or even within a particular circuit. Such uncertainty over the potential availability of attorney’s fees would, in my view, undermine the EAJA’s purpose of encouraging challenges to unreasonable governmental action. See Spencer, supra, at 249-250 , 712 F. 2d, at 563-564 . 2

*586 Finally, the Federal Courts of Appeals have concluded with near unanimity that “close scrutiny,” or de novo review, should be applied to district courts’ assessments of whether the Government’s legal position was substantially justified. See, e. g., Brinker v. Guiffrida, 798 F. 2d 661, 664 (CA3 1986); United States v. Estridge, 797 F. 2d 1454, 1457 (CA8 1986); Haitian Refugee Center v. Meese, 791 F. 2d 1489, 1496 (CA11 1986); United States v. Yoffe, 775 F. 2d 447, 451 (CA1 1985); Russell v. National Mediation Bd., 775 F. 2d 1284, 1289 (CA5 1985); Essex Electro Engineers, Inc. v. United States, 757 F. 2d 247, 252-253 (CA Fed. 1985); Hicks v. Heckler, 756 F. 2d 1022, 1024-1025 (CA4 1985); Sigmon Fuel Co. v. TVA, 754 F. 2d 162, 167 (CA6 1985); Boudin v. Thomas, 732 F. 2d 1107, 1117 (CA2 1984); United States v. 2,116 Boxes of Boned Beef, 726 F. 2d 1481 , 1486 (CA10), cert. denied sub nom. Jarboe-Lackey Feedlots, Inc. v. United States, 469 U. S. 825 (1984); Spencer, supra, at 251 , 712 F. 2d, at 565 . This weight of appellate authority reinforces my view that whether or not the Government’s interpretation of the law was substantially justified is an appropriate question for de novo review.

II

I do not believe that the District Court’s conclusion that the Government’s position in this litigation was not substantially justified could withstand appellate scrutiny under a de novo standard of review.

The. housing statute at issue in this case provided for three subsidy programs: a “deep-subsidy” program, an “interest-reduction” program, and an “operating-subsidy” program: *587 It was the Secretary’s failure to implement the last of these programs that was challenged by respondents.

The statute provided that the Secretary was “authorized to make, and contract to make” operating-subsidy and interest-reduction payments. 12 U. S. C. §§ 1715z — 1(f)(3), I715z-1(a) (1970 ed., Supp. IV) (emphasis added). In contrast, the statute stated that the Secretary “shall make, and contract to make” deep-subsidy payments. § 1715z-l(f )(2) (emphasis added). In 1974, after concluding that Congress had not authorized her to commit funds, sufficient to operate all three subsidy programs, Secretary Hills decided to devote the available funds to the more clearly mandatory deep-subsidy program (and to certain pre-existing commitments under the interest-reduction program)'.rather than to spread the funds among all three programs.

Whether or not the courts might differ with Secretary Hills on the scope of her discretion to decline to implement the operating-subsidy program, see ante, at 569, given the statutory language and the existing ease law, her conclusion was not without substantial justification. The statutory provisions instructing the Secretary to make deep-subsidy payments, but merely “authorizing” her to- make operating-subsidy payments, could reasonably be construed as vesting the Secretary with some discretion over the implementation of the operating-subsidy program. If Congress had intended to give the Secretary no choice in the matter, it is defensible to believe that Congress would have directed that the Secretary “shall make, and contract to make” operating-subsidy payments.

Moreover, the then-recent decision in Pennsylvania v. Lynn, 163 U. S. App. D. C. 288, 501 F. 2d 848 (1974), offered further support for the Secretary’s position. The Court of Appeals held in that case that the Secretary had not abused his discretion in suspending the interest-reduction program — under which the Secretary was likewise “authorized to make, and contract to make” payments — after he had con- *588 eluded that the program was not serving national housing goals. The Lynn case is not, of course, on all fours with this one. However, because Lynn suggests that the Secretary has a degree of discretion over whether to implement housing programs that are not couched in clearly mandatory statutory language, that decision would have given Secretary Hills reason to believe that such discretion could properly be exercised with regard to the operating-subsidy program. 3

Because I would conclude upon de novo review that the Secretary’s refusal to implement the operating-subsidy program was substantially justified, I would reverse the award of attorney’s fees under the EAJA. 4

That Congress remained silent as to the standard of review to be applied to district courts' determinations of whether an attorney's fee award is appropriate, yet explicitly directed that an “abuse of discretion" standard be applied to similar determinations by governmental agencies, see 5 U. S. C. 5 504(e)(2). would seem to militate against rather than in favor of the rule adopted by the majority. See ante, at 559. The more reasonable inference to be drawn from this difference in the statutory provisions governing court-awarded and agency-awarded attorney's fees is that Congress knew how to specify an “abuse of discretion" standard when it chose to do so and that Congress did not choose to do so with regard to attorney's fee awards by the district courts.

The majority suggests that an "abuse of discretion" standard is desirable in order to limit the amount of “appellate energy" expended on cases that are unlikely to-yield "law-clarifying benefits." Ante, at 561. 1 would have thought that decisions concerning- the allocation of appellate resources are better left to Congress than to this Court. If the courts of appeals are to concentrate their efforts on clarifying the law, at the expense of correcting district court errors that may affect only the parties to a particular case, then Congress ought to make that policy choice. In any event, if the law of the circuit is indeed "quite clear" at the time of the EAJA appeal, ibid., the appellate court may often have to expend relatively little energy in ascertaining whether the law was also reasonably clear at some earlier date. Of course, in those cases in which the law of the circuit remains unsettled at the time of the EAJA appeal, the appellate court may provide *586 needed guidance both to the Government and to any individuals with similar legal claims. The majority’s concern that de novo review will force the Government to take “needless merits appeals,” ibid., does not appear to be shared by the Government itself, which has argued throughout this litigation that the question whether a legal position was substantially justified ought to be reviewed under a de novo standard rather than an “abuse of discretion” standard.

In Dubose v. Pierce, 761 F. 2d 913 (CA2 1985), cert. pending, No. 85-516, the Court of Appeals held that the Secretary’s refusal to implement the operating-subsidy program was substantially justified for purposes of the EAJA. The court relied heavily on Pennsylvania v. Lynn in concluding that ”[t]he governing law, to the extent that it existed, did not mandate HUD’s surrender early in the litigation" and did not “becfolme so one-sided as to render HUD’s position clearly unjustifiable” even after several lower courts had ruled against the Secretary on the operating-subsidy program. 761 F. 2d. at 918.

The Court concludes that the amount of the award must be reconsidered. I agree in this respect and hence join Part V of the Court’s opinion.