Petition — Spencer v. National Labor Relations Board

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83-981 FILED

DEC 12 196:

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CLERK

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IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1983

STANLEY SPENCER, DAVID DALEY,

STEPHEN ODYSSEUS, JR.,

J. FORSTER BETTS, KENT JAFFA,

DARRELL TURPIN, RAFE BLACK, GARY BOWLES,

GORDON BOWN, AND I. CLEOO WRIGHT,

Petitioners,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR

THE

DISTRICT OF COLUMBIA CIRCUIT

MICHAEL ERNEST AVAKIAN

Center on National Labor Policy, Inc.

5211 Port Royal Road, Suite 400

North Springfield, VA 22151

(703) 321-9180

Counsel for the Petitioner

SES REE TREE ES E REI LEE SA TLE ELIE,

CLB PUBLISHERS & LITHOGRAPHERS, INC. © (201) 833-6220

(i)

QUESTION PRESENTED

In this case of first impression, whether the court of appeals

for the District of Columbia Circuit, in direct conflict with the

Second and Third Circuits, has contravened the fundamental

purpose of the Equal Access to Justice Act in holding that

scrutiny of the government’s actual “position” in court is the

appropriate standard for determining whether or not to award

attorneys’ fees to a prevailing party under the Act, rather than

scrutiny of both the government’s litigating position as well as

the underlying circumstances which gave rise to litigation.*

*Former NLRB Regional Director Francis Spearandeo appeared as a

defendant in the case below in his official capacity, but has sinc. been

removed upon his recent death.

QUESTION PRESENTED

OPINIONS BELOW

JURISDICTION

(ii)

TABLE OF CONTENTS

THIS CASE PRESENTS A GRAVE QUES-

TION CONCERNING THE ABILITY OF

A PREVAILING PARTY TO OBTAIN AN

AWARD AND SHOW THAT THE POSI-

TION OF THE UNITED STATES WAS

NOT SUBSTANTIALLY JUSTIFIED

UNDER THE EQUAL ACCESS TO JUS-

TICE ACT—A QUESTION WHICH HAS

PRODUCED A DIVISION OF OPINION

AMONG THE CIRCUIT COURTS OF

APPEAL AND WHICH WILL RESULT IN

RECURRING LITIGATION ...............

THE COURT OF APPEALS ERRONE-

OUSLY HELD THAT THE GOVERN-

MENT NEED ONLY SUBSTANTIALLY

JUSTIFY ITS LITIGATION POSITION

TO DEFEAT AN EAJA APPLICATION

FOR ATTORNEYS FEES .............0..

A. THE STATUTORY PURPOSE OF THE

EAJA AND COMMON SENSE RE-

QUIRE SCRUTINY OF BOTH THE

UNDERLYING ACTION AND LITI-

GATION POSITION OF THE GOV-

eee eee eee ee eee eee eee

oe eee eee ree eee eee

(iii)

B. THE COURT OF APPEALS DECI-

SION CONFLICTS WITH DECI-

SIONS OF OTHER CIRCUITS

WHICH REQUIRE BOTH PRE-

LITIGATION AND POST-LITIGA-

TION POSITIONS TO BE SUB-

STANTIALLY JUSTIFIED.................

ES + CNM ae Cabs eek Cebadeaesreneebicerrcns

eons as Keb eres wh dia oe cave haces weds

A. Statutory Provisions Involved ...................

B. Opinion and Order of the United States

SE eer acenihseakbainsaveeeess

C. Opinion and Order of the United States Court

of Appeals for the District of Columbia

Ee ere are ae

D. Order Denying Petition For Rehearing of the

United States Court of Appeals For the District

FE eke kes dakdbe dds pane sedis ss

E. Order Denying Petition For Rehearing en banc

of the United States Court of Appeals for the

Disteiot of Cobemibia Cigault ooo cccacccccccscces

(iv)

TABLE OF AU1HORITIES

Cases: Page

Alspach v. District Director of Internal Revenue,

er i, Be A Br ROOED conc wcensrscgccedan 7,10

Center for Science in the Public Interest v. Department

of the Treasury,

Pees G-Oie CEE. Bele G, BOGEN. cc os vccccccedecsess 13

Costantino v. United States,

DO Ws WE BU BNOED cv eccccccasecdsceceue 12

Environmental Defense Fund v. Watt,

554 F. Supp. 36 (S.D.N.Y. 1983), aff'd, No. 83-6005

ee TE errr eerie re 8,10

Fitzgerald v. Hampton,

Se re I ee Gls BOGE) ov vc ccccvcccccsccccess 15

Globe Inc. v. United States,

ee oy EL 2 EE, UND se cosccencdsccceseconse 15

Goldhaber v. Foley,

Goes Fane Sra, 6e Cre CO. 19GS) «desc cc clccccccceces 10

Heydt v. Citizens State Bank,

Se ee EE Ge BED oc occvccccdceccvccsacesens 7

Kent C. Jaffe & Rafe G. Black,

258 N.L.R.B. No. 138, 108 LRRM 1145 (1981) ........ 5

NAACP v. Donovan,

Fc Be Fae is Pec tccccccceccbicseves 15

Natural Resources Defense Council v. U.S.

Environmental Protection Agency,

Fee F.26 FOO (96 Co. 1FGS) 2... cccvaccccecs 15,16,17,18

Nunes-Correia v. Haig,

SEP Ws UA BEd CAME BFGE oi vedicccccducscecvcs 15

Ocasio v. Schweiker,

540 F. Supp. 1320 (S.D.N.Y. 1982) ................6. 12

(v)

Operating Engineers Local No. 3 v. Bohn,

541 F. Supp. 486 (D. Utah 1982) ................. 12,13

Photo Data Inc. v. Sawyer,

ee I, BOND ccc cocccescvednceuns 7

Spencer, et. al. v. N.L.R.B.,

Oe Ws UI, Be CEG. IDES). cc cccccscccces 2,5,10,15

Spencer, et. al. v. N.L.R.B.,

712 F.2d 539 (D.C. Cir. 1983)............ 2,6,9,10,11,15

STATUTES:

Judiciary and Judicial Procedure Act,

ee a ka uke Teuseesckcaceneneesa 2

snes tee daclodecss escapes seesdeds 4

ks unas cu seheccesecccesessees 4

National Labor Relations Act, i

Nene snk kis deb ed bavceese bien 2,3

ee aha reecndcnceccacnstsace 2,3

Equal Access To Justice Act,

Ne cn ok co bbesiccehssucboonena 2,5

ee re ica bwesendpecsdeeresesnnes 5

Ds cnc wecccccccscccenccoccese 7

LEGISLATIVE HISTORY:

House Report No. 96-1418, reprinted in [1980]

U.S. CODE CONG. & AD. NEWS.................. 7,11

PUBLICATIONS

Courts Debate Reach of Equal Access To Justice Act,

Legal Times of Washington (May 16, 1983) 16......... 8,14

The Award of Attorney's Fees Under the

Equal Access to Justice Act,

BD Bere Ea, TROY, S07, (EDGE) cc cccccccccccscsecccs 13,14

Recovering Attorneys’ Fees From The Government

Under The Equal Access to Justice Act,

ee Ee Ek EE MEOUED wo vcccccccccccebosceciedes 13

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1983

No.

STANLEY SPENCER, DAVID DALEY,

STEPHEN ODYSSEUS, JR.,

J. FORSTER BETTS, KENT JAFFA,

DARRELL TURPIN, RAFE BLACK, GARY BOWLES,

GORDON BOWN, AND I. CLEOO WRIGHT,

Petitioners,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR

THE DISTRICT OF COLUMBIA CIRCUIT

Petitioners, Stanley Spencer, et. al., respectfully pray that

a writ of certiorari issue to review the judgment and opinion

of the United States Court of Appeals for the District of

Columbia Circuit entered in this proceeding on June 28,

1983. A petition for rehearing was denied on September

13, 1983.

—

OPINIONS BELOW

The opinion and order of the United States District Court

for the District of Columbia, reported at 548 F. Supp. 256

(D.D.C. 1982), is reproduced in Appendix B. The opinion

and order of the United States Court of Appeals for the Dis-

trict of Columbia Circuit, reported at 712 F.2d 539 (D.C.

Cir. 1983), is reproduced in Appendix C. The order denying

rehearing and rehearing en banc are reproduced at Appendix

D and E respectively.

JURISDICTION

The judgement of the Court of Appeals was entered on

June 28, 1983 and a timely petition for rehearing was denied

on September 13, 1983. This petition is filed within 90 days

of entry of the order denying the petition for rehearing. This

Court’s jurisdiction is invoked pursuant to 28 U.S.C.

§1254(1).

STATUTORY PROVISIONS INVOLVED

The National Labor Relations Act, 29 U.S.C. § 151-169,

specifically sections 159 (b) and (c) are involved in this case

as well as section 204 of the Equal Access to Justice Act, 28

U.S.C. §2412. The pertinent text of these provisions is set

out in Appendix A.

STATEMENT OF THE CASE

In 1938, the Utah Power and Light Company (the “‘com-

pany’’) voluntarily recognized the International Brotherhood

of Electrical Workers, Local 57 (‘the union’) as the

exclusive bargaining representative of its employees. The

company afforded the union this status to avoid and to settle

numerous alleged unfair labor practices. The bargaining unit,

voluntarily agreed to by the union and the company, con-

sisted of all company employees except managerial

employees and supervisors, and included a number of non-

supervisory, qualified engineers. The respondent National

Labor Relations Board (“the Board’’) assented to the parties

stipulation at that time and certified the union as the bargain-

ing representative of the employees of the Utah Power and

Light Company, “excluding management and those super-

visory officials who have authority to hire and fire.” (J.A.

15).!

In 1978, approximately 100 of the 2,600 unit employees at

Utah Power and Light Co. were qualified engineers with

advanced degrees from well-known universities. In that year,

of the 100 qualified engineers, 72 (72%), including petitioner

Spencer, filed a decertification petition with the Board pur-

suant to section 9(c), 29 U.S.C. §159(c), of the National

Labor Relations Act (“the Act” or “NLRA”) seeking to

remove the union as the representative of the engineers. They

contended that as professional employees, they were entitled

to vote as a separate group regarding union representation

under 29 U.S.C. §159(b) (1) of the National Labor

Relations Act. (2a)

*‘a” references in this Petition are to the accompanying appendix.

“J.A.” references are to the separately printed Joint Appendix in the

United States Court of Appeals for the District of Columbia Circuit.

On December 22, 1978, the Regional Director of the Board

issued an order dismissing the decertification petition. He

noted that the “unit [presently] represented by the Union

includes employee classifications other than engineer and that

the established Board policy is for a ‘‘decertification election

[to] be coextensive with the unit previously certified or the unit

recognized.’ ”’ (J.A. 22). Since the engineers sought to de-

certify only part of the existing bargaining unit, he concluded

that the decertifying unit was inappropriate and dismissed the

petition. In so doing, he also noted that the engineers “have

been within the unit since its inception, or at least prior to the

1947 Amendments to the Act.’’?

On January 2, 1979, the engineers requested Board review

of the Regional Director’s action, but were denied that

request on January 29, 1979. The engineers then filed a peti-

tion seeking a clarification of the bargaining unit by the

Board.

On January 30, 1979 the Regional Director dismissed the

latter petition on the ground that the engineers lacked stand-

ing to petition for unit clarification because under Board rules

and regulations they qualified as neither a “labor organiza-

tion nor as an employer.” (J.A. 26).

In September of 1979, the engineers, pursuant to 28

U.S.C. § 1331 and 1337, filed a complaint in the United

States District Court for the District of Columbia, seeking

declaratory and injunctive relief to secure their voting rights

as professional employees. (J.A. 2). Meanwhile, another

decertification filing period opened up in November of 1980

and the engineers again filed a petition for decertification with

~ 4in 1947, the Taft-Harley Act, added the § 9(b) (1) statutory prohibi-

tion against the defendant Board certifying any mixed unit of professional

and non-professional employees unless the former first vote for inclusion.

29 U.S.C. §159(b) (1).

the Board. While the court action was pending on cross

motions for summary judgment, the Board, on September 30,

1981, recanted and decided that the engineers were indeed

professional employees under the NLRA and were entitled to

have an election. Kent C. Jaffe & Rafe G. Black, 258

N.L.R.B. No. 138, 108 L.R.R.M. 1145 (1981) (J.A. 36).

Finally, on October 14, 1981, the Board effectively mooted

the case by granting all the relief sought by the engineers, viz.,

a holding that they were professional employees and the con-

diiction of an election on October 29, 1981.

The government promptly moved to dismiss the case as

moot on November 6, 1981, which the engineers did not

oppose. (J.A. 33) The engineers then filed an application for

costs and attorneys’ fees in the district court as “prevailing

parties” pursuant to the Equal Access to Justice Act, 28

U.S.C. §2412 (“EAJA”), for the period between February

1979 and November 1981. The district court found that the

engineers were “prevailing parties” under 28 U.S.C.

§ 2412(a) for EAJA purposes as a result of voluntary Board

relief finally granting them their long-sought-after election

(8b). However, the court found that the Board’s reason for

rejecting the first decertification petition and its litigation

argument contesting district court jurisdiction were both sub-

stantially justified. Spencer, et. al v. NLRB, 548 F. Supp.

256, 264 (D.D.C. 1982) (20b). Although it did not

“necessarily accept the Board’s view of the limits of section

9(b) (1) “the court nevertheless held that “‘there was at least a

reasonable basis for the Board’s initial decision. . .denying

plaintiffs’ decertification petition.” Jd., at 263-264 (18b).

Therefore “[a]n award of attorneys’ fees in this case would

simply not account for the reasonable and legitimate exercise

of [discretionary] functions by the NLRB. . .however prob-

lematical [its position] on the merits.” Jd., at 265 (21b).

Petitioner engineers appealed this judgement to the United

States Court of Appeals for the District of Columbia Circuit.

The court of appeals affirmed the judgement based upon the

strength of the Board’s arguments proffered before it and

before the district court. In a lengthy analysis, the court con-

cluded that in considering an application for attorneys’ fees

under EAJA, the government need on/y prove that its posi-

tion taken in litigation need be substantially justified. (36c)

Therefore, in the opinion of the court of appeals, because “the

Board’s litigation position (founded on jurisdictional argu-

ments gleaned from Leedom v. Kyne) was clearly substan-

tially justified” in denying petitioners’ initial requests for a

decertification election, an EAJA award was not warranted.

Spencer, 712 F.2d at 567 (59c). The court expressly held

that because the Board’s litigation position was substantially

justified it was unnecessary to examine the Board’s adminis-

trative actions which created the underlying controversy

which led the engineers to seek the protection of the district

court. Id., at 568 (61c).

REASONS FOR GRANTING THE WRIT

THIS CASE PRESENTS A GRAVE QUES-

TION CONCERNING THE ABILITY OF A

PREVAILING PARTY TO OBTAIN AN

AWARD AND SHOW THAT THE POSI-

TION OF THE UNITED STATES WAS NOT

SUBSTANTIALLY JUSTIFIED UNDER

THE EQUAL ACCESS TO JUSTICE ACT—

A QUESTION WHICH HAS PRODUCED A

DIVISION OF OPINION AMONG THE

CIRCUIT COURTS OF APPEAL AND

WHICH WILL RESULT IN RECURRING

LITIGATION.

The Equal Access to Justice Act represents the most

recent departure from the “American Rule” governing the

award of attorneys’ fees to parties who prevail in actions

against the United States. Section 2412(d) (1) (A) of the Act,

which lies at the root of this controversy, provides that a court

shall award to a prevailing party in a civil action against the

United States fees and expenses “unless the court finds that

the position of the United States was substantiall:; justified or

that special circumstances make an award unjust.”’ (Sa). The

burden is on the defending agency to make this point. Heydt

v. Citizens State Bank, 668 F.2d 444, 447 (8th Cir. 1982).

In the posture of the instant case, this burden requires the

Board to show more than that their position was not “‘ar-

bitrary, frivolous and groundless.” [1980] U.S. CODE

CONG. & AD. NEWS at 4993. The Board must show that

their actions were substantially justified.

A technical dispute in the federal courts concerning

whether the “position” requiring this substantial justification

refers to the “litigation posture” of the United States or to the

“underlying circumstances” generating the civil action arose

immediately subsequent to enactment. The first two reported

decisions considering this question reached different con-

clusions regarding the term “position.” In Alspach v. District

Director of Internal Revenue, 527 F. Supp. 225 (D. Md.

1981), the court adopted the version that the “position” the

government must prove was substantially justified refers to

the position of the United States taken in litigation before a

court. In Photo Data Inc. v. Sawyer, 533 F. Supp. 348

(D.D.C. 1982), the court held that it is both the government’s

litigation position as well as the “‘underlying action’”’ giving

rise to litigation that the United States must substantially jus-

tify to avoid an award of attorneys’ fees to a prevailing party

under EAJA. Consequently, resolution of the issues in this

case will significantly aid in the administration of the

statute.

As one court has noted “[nJeither the language nor the

legislative history of the EAJA indicates that Congress in-

tended the courts to distinguish between the government’s

primary activity and its litigation stance in determining

whether its ‘position’ was substantially justified.” Environ-

mental Defense Fund v. Watt, 554 F. Supp. 36, 40-41

(S.D.N.Y. 1983) aff'd, No. 83-6005 (2d Cir. Dec. 1, 1983).

The court of appeals below noted that “in the large majority

of contexts, it makes no functional difference how one con-

ceives of the government’s ‘position’.”” Spencer v. NLRB,

712 F.2d at 551. (25c). This is because “the governmental

action that precipitates the controversy almost invariably is

its litigation position. . . [and] [o]nly in a minority of cases

does it matter whether a court. . .looks to the government’s

original behavior or to its subsequent legal arguments.” Jd.,

at 551-52. (25-26c).

Unfortunately, this case falls within that identified class of

cases “‘and ironically, those cases are precisely the ones in

which the private parties have the best opportunity to recover

fees under the EAJA.” See Courts Debate Reach of Equal

Access to Justice Act, Legal Times of Washington (May 16,

1983) 16. This is because private parties must assume the

position of plaintiff/petitioner to obtain declaratory judg-

ments, injunctions, temporary restraining orders or to pre-

serve their assets from diminution of value or from

seizure.

Analyzing the instant case, the court of appeals focused

only upon the Board’s defensive litigation position which pre-

sented the argument that the district court lacked subject mat-

ter jurisdiction to entertain the case. The court expressly held

that “we need not speculate much about the Board’s

[underlying] position on the merits of [Spencer’s] claims.”

Spencer, 712 F.2d at 568 (61c). Thus, only half of Spencer’s

arguments were considered by the court of appeals, yet the

merits are precisely the grounds upon which the lawsuit

was based.

A decision by this Court on the “position” issue would

resolve a substantial number of cases that are now pending

before the federal courts and a flurry of contradictory

decisions, all involving this question. The opinion of the court

of appeals not only produces incongruous results, but also

highlights the necessity for this Court to provide guidance

concerning the proper scope of court examination of an

EAJA attorney fee petition and the proper development of

the law under the Act. Review is especially desirable since

the District of Columbia Circuit Court receives a consider-

able amount of federal litigation concerning agency action.

THE COURT OF APPEALS ERRONE-

OUSLY HELD THAT THE GOVERNMENT

NEED ONLY SUBSTANTIALLY JUSTIFY

ITS LITIGATION POSITION TO DEFEAT

AN EAJA APPLICATION FOR ATTOR-

NEYS FEES.

A. THE STATUTORY PURPOSE OF THE

EAJA AND COMMON SENSE REQUIRE

SCRUTINY OF BOTH THE UNDERLY-

ING ACTION AND LITIGATION POSI-

TION OF THE GOVERNMENT.

The District of Columbia Circuit and other courts which

have been confronted with the issue at hand are in substantial

agreement that the legislative history of the EAJA, because it

is either silent or ambiguous, is not of much assistance in

determining what is meant by the term “position.”’ Spencer,

712 F.2d at 549 (10c); Goldhaber v. Foley, 698 F.2d 193,

196 (3d Cir. 1983); Photo Data Inc. v. Sawyer, 533 F. Supp.

348 (D.D.C. 1982); Alspach v. District Director of Internal

Revenue, 527 F. Supp. 225 (D. Md. 1981). Each side can

point to “equally evocative statements” supportive of the

litigation position or underlying action. Spencer, at 549

(19c). However, in Environmental Defense Fund Inc. v.

Waitt, 554 F. Supp. at 40, the court noted that “[i]f anything,

the ‘conflicting’ references in the legislative history to both of

these factors suggest that both should be taken into account.”

Indeed, this approach is more compatible with the remedial

purposes of the Act, the examination of which becomes

necessary because of the absence of interpretive aid provided

by the Act’s statutory language and legislative history.

The fundamental purpose and objective of the EAJA, as

correctly noted by the court of appeals below, “was to

encourage relatively impecunious private parties to challenge

unreasonable or oppressive governmental behavior by reliev-

ing such parties of the fear of incurring large litigation ex-

penses.” Spencer at 549, n. 38 (21c). The court went on to

explain that the Act’s purpose would further three ad-

ditional goals:

provide relief to the victim of abusive government con-

duct [by] enabl[ing] them to vindicate their rights

without assuming enormous financial burdens. . .;

reduce the incidence of such abuse [and]. . .;

refine the administration of federal law-to foster greater

precision, efficiency and fairness in the interpretation of

statutes and in the formulation and enforcement of

governmental regulations by exposing a greater number

of governmental actions to adversarial testing.

Id. at 550 (22c).

However, these policy objectives will never be realized if

the district courts are constrained to accept the government’s

proposition that only its defensive “‘litigation posture’ must

be substantially justified to withstand the assessment of an

EAJA award. The court of appeals would restrict the review-

ing court from looking back at unreasonable prelitigation

events which may have forced a party to initiate or defend

legal action to protect itself. Such a restrictive construction of

a remedial statute results in the government’s escaping

liability for fees in too many cases in which Congress clearly

intended an award to be made.

An adjudication or civil action provides a concrete

adversarial test of Government regulation and thereby

insures the legitimacy and fairness of the law. An

adjudication, for example, may show that an agency rule

is erroneous or inaccurate, or it may provide a vehicle for

developing or announcing more precise rules. The bill

thus recognizes that the expense of correcting error on

the part of the Government should not rest wholly on the

party whose willingness to litigate or adjudicate has

helped to define the limits of Federal authority. Where

parties are serving a public purpose, it is unfair to ask

them to finance through their tax dollars unreasonable

Government action and also bear the cost of vindicating

their rights.

House Report No. 96-1418, reprinted in [1980] U.S.

CODE CONG. & AD. NEWS 4988 (emphasis added).

For example, in certain instances where an applicant has

filed for an EAJA award, there will be little if any litigation

position existing for a court to examine to resolve the ques-

tion of “substantial justification.”” Reported cases disclose

situations where the government has acted unreasonably

towards an individual or small business, making no attempt

whatsoever to comply with the legal obligations applicable to

it. The private party has then been forced to call the

government’s bluff and initiate legal action to redress the

behavior. Then, just before or shortly after the complaint has

been filed, the government removes the issues of the case

from the court prior to a decision on the merits through either

a settlement, consent judgement or mootness. Costantino v.

United States, 536 F. Supp. 60 (E.D. Pa. 1981) (taxpayer

sought and was refused an overpayment until he sued IRS

whereupon the sum was promptly refunded); Ocasio v.

Schweiker, 540 F. Supp. 1320 (S.D.N.Y. 1982) (after

administrative attempts to convince the agency that interpreta-

tion of the statute denying her benefits was erroneous, plain-

tiff filed suit at which time the agency quickly acknowledged

error); Operating Engineers Local No. 3 v. Bohn, 541 F.

Supp. 486 (D. Utah 1982) (Department of Transportation

capitulated to plaintiffs interpretation of relevant regulations

within nine days after service of the complaint).

It is the court of appeals view that in these cases, the

unreasonable or capricious nature of the actions taken by

governmental agencies should not be considered in determin-

ing whether the “position of the United States” was substan-

tially justified. Instead of examining the justification for the

“underlying action” of the government, it is the court’s belief

that the reasonableness of the Justice Departments’ “‘litiga-

tion position” before the court should exclusively govern

the question.

The infirmity of this reasoning is readily apparent.

Examination of the litigation position alone in the context of

the above described cases will invariably be found justified or

even “laudable,” Bohn, 541 F. Supp. at 495, and no private

party could ever expect to recover a fee award. This result

obtains despite the fact that the plaintiff has already incurred

legal fees by hiring counsel to represent him.

Such was the result in Center for Science in the Public

Interest v. Department of the Treasury, No. 82-610 (D.D.C.

July 8, 1983), which was decided just one week after the in-

stant case. The district court therein found an agency regula-

tion to be arbitrary, capricious and an abuse of discretion.

However, citing Spencer, the court nevertheless ruled that

the government’s litigation position was substantially jus-

tified, and thus, request for an EAJA fee award was

denied.

Commentators who have recognized the problem pre-

sented in this petition unanimously agree that the government

should justify both the litigation position and its under-

lying action.

Otherwise the government could continue to promulgate

and enforce arbitrary regulations only to capitulate

when served with a complaint. Under the interpretation

that requires justification of only the litigation provision,

this scenario would constitute justified behavior because

the government did nothing unreasonable in the litiga-

tion. The beleaguered party would still be harassed but

would be unable to collect attorney’s fees. Such a result

would be clearly contrary to the spirit and purposes of

the Act.

The Award of Attorney's Fees Under the Equal Access to

Justice Act, 11 Hofstra L. Rev. 307, 321 (1982); Recovering

Attorneys’ Fees From The Government Under The Equal

Access To Justice Act, 56 Tulane L. Rev. 903, 914 (1982);

Courts Debate Reach of Equal Access to Justice Act, Legal

Times of Washington (May 16, 1983) 16.

If courts entertaining EAJA applications continue to con-

done such agency behavior with respect to individuals and

small businesses, the deterrent effect raised by the specter of

fees will leave little impression upon it. If an agency can move

to cloak underlying administrative actions from judicial

scrutiny, they will constantly shield themselves from adverse

fee awards under the EAJA. See e.g., The Award of Attor-

ney’s Fees Under the Equal Access to Justice Act, 11 Hofstra

L. Rev. 307, 326 (1982) (demonstrating that in cases where

only the government's litigation position need be justified an

award of attorney’s fees is not made).

This result is exactly what the court of appeals chose to

perpetuate when it failed to examine the merits of the

underlying statutory controversy in this case.’ The fact that

the Board moved quickly after a complaint was filed to grant

petitioners the relief sought for two years, and the mooting of

the case, should not preclude judicial inquiry into those pre-

litigation events to determine the substantial justification of

the government’s entire administrative position - from day

one to dismissal.

B. THE COURT OF APPEALS DECISION

CONFLICTS WITH DECISIONS OF

OTHER CIRCUITS WHICH REQUIRE

BOTH PRE-LITIGATION AND POST-

LITIGATION POSITIONS TO BE SUB-

STANTIALLY JUSTIFIED.

The district court in the case at bar opined that mootness stripped the

court of jurisdiction to resolve the question under Article III of the Con-

stitution (6-7b).

As recognized by the court of appeals, courts are evenly

split on what nasition the government must substantially jus-

tify when confrented with an EAJA application. Spencer,

712 F.2d at 546 n.27 & 28 (14c). The decision by the court

in this case is most notably at odds with its own district court,

Globe Inc. v. U. ‘ted States, 553 F. Supp. 7 (D.D.C. 1982);

Fitzgerald v. Hampt 2, 545 F. Supp. 53 (D.D.C. 1982);

Nunes-Correia v. Haig, 543 F. Supp. 812 (D.D.C. 1982);

Photo Data, Inc. v. Sawy 533 F. Supp. 348 (D.D.C.

1982); NAACP v. Donovan, 554 F. Supp. 715 (D.D.C.

1982), as well as that of the Third Circuit in Natural Re-

sources Defense Council v. U.S. Environmental Protection

Agency, 703 F.2d 700 (3d Cir. 1983), which hold that it is

both the underlying and litigation position of the government

which must be scrutinized to resolve the defense of substan-

tial justification. * Since the decision in this case, conflicting

opinions steadily continue to emanate from the federal

courts. °

The Third Circuit decision in Natural Resources Defense

Council is particularly significant because it further high-

lights the damaging effect that attention to the government’s

‘Even the district court in the instant case, Spencer v. N.L.R.B. 548 F.

Supp. 256, 262 n.14 (D.D.C. 1982) (14b) found that this view [both

positions] seems to be more consistent with the remedial objectives of the

EAJA,” although it refrained from deciding the issue.

‘Courts holding that only the litigation position need be substantially

justified include Smith v. Schweiker, 563 F. Supp. 891 (E.D.N.Y.

1982); Environmental Defense Fund Inc. Environmental Protection

Agency, No. 82-1346 slip op. (D.C. Cir. August 30, 1983); Ellis v.

United States, Nos. 83-556, 83-724 slip op. (Fed. Cir. July 13, 1983);

Glick v. U.S. Civil Service Commission, Nos. 77 C 1458, 78 C 2753 slip

op. (N.D. Ill. July 25, 1983); Catarino v. Schweiker, No. 81-1021-S slip

op. (D. Mass. July 19, 1983); Lacy v. Lehman, 563 F. Supp. 111 (S.D.

Calif. 1983).

litigation position alone would have upon the purpose of the

Act. The plaintiff in that case challenged the authority of the

EPA to postpone indefinitely regulatory amendments requir-

ing industries to meet pretreatment standards before dis-

charging certain pollutants into publicly owned treatment

works. The NRDC repeatedly advised EPA that this

postponement decision was in violation of the Administrative

Procedure Act’s rulemaking procedures subject to notice and

comment, but the agency ignored these warnings.

After a complaint was filed, the EPA acknowledged it had

been “’[c]aught redhanded in a violation of the law concerning

notice and comment rulemaking [and] terminated the

indefinite postponement, established an effective date for the

amendments, and initiated a notice and comment period

before any further postponement.” National Resources

Defense Council, 703 F.2d at 712. The plaintiff then filed a

petition for fees under the EAJA, but the EPA opposed the

request by offering a defense identical to that in Bohn - that

it’s litigation position was not only substantially justified but

that “it responded to the lawsuit in a commendable way by

conforming its actions to the law.” Jd.

Judge Gibbons, writing for the majority in a 2-1 decision,

condemned the government’s defense stating:

The interpretation adopted by the dissent and the Broad

Avenue, Tyler, and Riggers courts means that no matter

Courts holding that both the litigation position as well as the underlying

circumstances must be examined include Walton v. Lehman, 570 F.

Supp. 491 (E.D. Pa. 1983); Lonning v. Schweiker, 568 F. Supp. 1079

(E.D. Pa. 1983); Ward v. Schweiker, 562 F. Supp. 1173 (E.D. Pa.

1983); Boudin v. Thomas 554 F. Supp. 703 (S.D.N.Y. 1982); Gross v.

Schweiker, 563 F. Supp. 260 (N.D. Ind. 1983); Guthrie v. Schweiker,

718 F.2d 104 (4th Cir. 1983); and Watkins v. Harris, 566 F. Supp. 493

(E.D. Pa. 1983).

how outrageously improper the agency action has been,

and no matter how intransigently a wrong position has

been maintained prior to the litigation, and no matter

how often the same agency repeats the offending con-

duct, the statute has no application, so long as

employees of the Justice Department act reasonably

when they appear before the court.

_ National Resources, at 706-07.°

In a separate concurring opinion, Judge Thompson stated

that “fees would be awarded to a prevailing party to the

extent that the government’s action in causing a party to

litigate and to continue to litigate was not substantially jus-

tified.”” Jd., at 715.

Otherwise:

examination merely of the government’s litigation posi-

tion would mean that no matter how improper the

agency conduct that caused the suit to be filed or no mat-

ter how capriciously that position was maintained prior

to suit, even after substantial sums have been expended

to institute suit, the government can avoid payment of

any fees merely by taking corrective action or by main-

taining a different, although justifiable, litigation

posture.

Id., at 715.

Applying the above rationale to the objectives which the

Act sought to achieve, Judge Gibbons concluded by stating

that “the agency’s own subsequent conduct. . .reveals that the

EPA knew all along that its position was legally untenable. It

*The cases cited by the court are Broad Avenue Laundry and Tailor-

ing v. United States, 693 F.2d 1387 (Fed. Cir. 1982); Tyler Business

Services, Inc. v. NLRB, 695 F.2d 73 (4th Cir. 1982); and S&H Riggers

& Erectors, Inc. v. OSHRC, 672 F.2d 426 (5th Cir. 1982). Petitioner

believes that the Fourth Circuit decision is not entirely to the contrary.

See Tyler, at 76 n. 13.

nevertheless continued to resist reinstatement of the repealed

rules. . . .If ever a case fit precisely the mold of bureaucratic

arbitrariness which [is] . . . the target of the Equal Access to

Justice Act, this is the case.”’ Jd., at 712.

Like the plaintiffs in NRDC, the petitioners in the instant

case were forced to come into federal court to protect their

statutory franchise right which had been repeatedly dis-

paraged over a two year period by the agency Board. Only

after the complaint was filed did the Board acknowledge that

its position was legally untenable in refusing to follow its own

case law to allow petitioners a decertification vote. The

Board then stubbornly resisted petitioner’s application for an

EAJA fee on the ground that its litigation position alone,

based only on the absence of district court jurisdiction, need

be and was substantially justified. The court of appeals

accepted this interpretation in rejecting a fee award and

refused to examine the Board’s conduct that caused the suit to

be filed, despite substantial sums having been expended to

correct the illegal action. ‘““This anomalous [result] . . . con-

travene[s] the overriding concern repeatedly expressed by the

Congress to remove the specter of overwhelming litigation

costs from a party’s determination of whether to contest

unreasonable governmental conduct.”” National Resources

Defense Council, 703 F.2d at 715.

CONCLUSION

This matter is one of first impression for this Court involv-

ing a solemn question of statutory construction. EAJA’s pur-

pose of ensuring greater responsibility among governmental

agencies in preparing well founded actions and refining the

interpretation of federal law and regulations will never be

realized if the court of appeals decision is allowed to become

the governing precedent. For this reason, Petitioners re-

spectfully request that a Writ of Certiorari issue to review the

judgement of the court of appeals.

Respectfully submitted,

MICHAEL ERNEST AVAKIAN

Center on National Labor Policy, Inc.

5211 Port Royal Road, Suite 400

North Springfield, VA 22151

(703) 321-9180

Counsel for the Petitioner

December 12, 1983

Appendix A

§157. Right of employees as to organization, collective

bargaining, etc.

Employees shall have the right to self-organization, to

form, join, or assist labor organizations, to bargain collec-

tively through representatives of their own choosing, and to

engage in other concerted activities for the purpose of collec-

tive bargaining or other mutual aid or protection, and shall

also have the right to refrain from any or all of such activities

except to the extent that such right may be affected by an

agreement requiring membership in a labor organization as a

condition of employment as authorized in section 158(a)(3)

of this title.

July 5, 1935, c. 372, §7, 49 Stat. 452; June 23, 1947, c. 120,

Title I, §101, 61 Stat. 140.

29 U.S.C. §159. Representatives and elections

Exclusive representatives; employees’ adjustment of

grievances directly with employer

(a) Representatives designated or selected for the pur-

poses of collective bargaining by the majority of the

employees in a unit appropriate for such purposes, shall be

the exclusive representatives of all the employees in such unit

for the purposes of collective bargaining in respect to rates of

pay, wages, hours of employment, or other conditions of

employment: Provided, That any individual employee or a

group of employees shall have the right at any time to present

grievances to their employer and to have such grievances

adjusted, without the intervention of the bargaining represen-

tative, as long as the adjustment is not inconsistent with the

terms of a collectiave-bargaining contract or agreement then

in effect: Provided further, That the bargaining representa-

tive has been given opportunity to be present at such

adjustment.

Determination of bargaining unit by Board

(b) The Board shall decide in each case whether, in order

to assure to employees the fullest freedom in exercising the

rights guaranteed by this subchapter, the unit appropriate for

the purposes of collective bargaining shall be the employer

unit, craft unit, plant unit, or subdivision thereof: Provided,

That the Board shall not (1) decide that any unit is appro-

priate for such purposes if such unit includes both pro-

fessional employees and employees who are not professional

employees unless a majority of such professional employees

vote for inclusion in such unit; or (2) decide that any craft unit

is inappropriate for such purposes on the ground that a dif-

ferent unit has been established by a prior Board determina-

tion, unless a majority of the employees in the proposed craft

unit vote against separate representation or (3) decide that

any unit is appropriate for such purposes if it includes,

together with other employees, any individual employed as a

guard to enforce against employees and other persons rules to

protect property of the employer or to protect the safety of

persons on the employer’s premises; but no labor organiza-

tion shall be certified as the representative of employees in a

bargaining unit of guards if such organization admits to mem-

bership, or is affiliated directly or indirectly with an organiza-

tion which admits to membership, employees other than

guards.

Hearings on questions affecting commerce;

rules and regulations

(c)(1) Whenever a petition shall have been filed, in accor-

dance with such regulations as may be prescribed by the

Board—

(A) by an employee or group of employees or any

individual or labor organization acting in their behalf

alleging that a substantial number of employees (i) wish

to be represented for collective bargaining and that their

employer declines to recognize their representative as

the representative defined in subsection (a) of this sec-

tion, or (ii) assert that the individual or labor organiza-

tion, which has been certified or is being currently

recognized by their employer as the bargaining represen-

tative, is no longer a representative as defined in subsec-

tion (a) of this section; or

(B) by an employer, alleging that one or more

individuals or labor organizations have presented to him

a claim to be recognized as the representative defined in

subsection (a) of this section;

the Board shall investigate such petition and if it has reason-

able cause to believe that a question of representation affect-

ing commerce exists shall provide for an appropriate hearing

upon due notice. Such hearing may be conducted by an

officer or employee of the regional office, who shall not make

any recommendations with respect thereto. If the Board finds

upon the record of such hearing that such a question of

representation exists, it shall direct an election by secret

ballot and shall certify the results thereof.

28 U.S.C. §2412. Costs and fees

(a) Except as otherwise specifically provided by statute, a

judgment for costs, as enumerated in section 1920 of this title,

but not including the fees and expenses of attorneys, may be

awarded to the prevailing party in any civil action brought by

or against the United States or any agency and any official of

the United States acting in his or her official capacity in any

court having jurisdiction of such action. A judgment for costs

when taxed against the United States shall, in an amount

established by statute, court rule, or order, be limited to reim-

bursing in whole or in part the prevailing party for the costs

incurred by such party in the litigation.

(b) Unless expressly prohibited by statute, a court may

award reasonable fees and expenses of attorneys, in addition

to the costs which may be awarded pursuant to subsection (a),

to the prevailing party in any civil action brought by or against

the United States or any agency and any official of the United

States acting in his or her official capacity in any court having

jurisdiction of such action. The United States shall be liable

for such fees and expenses to the same extent that any other

party would be liable under the common law or under the

terms of any statute which specifically provides for such an

award.

agency and any official of the United States acting in his or her

official capacity for costs pursuant to subsection (a) shall be

paid as provided in sections 2414 and 2517 of this title and

shall be in addition to any relief provided in the judgment.

(2) Any judgment against the United States or any agency

and any official of the United States acting in his or her official

capacity for fees and expenses of attorneys pursuant to sub-

section (b) shall be paid as provided in sections 2414 and

2517 of this title, except that if the basis for the award is a find-

ing that the United States acted in bad faith, then the award

shall be paid by any agency found to have acted in bad faith

and shall be in addition to any relief provided in the

judgment.

(d) (1) (A) Except as otherwise specifically provided by

statute, a coi rt shall award to a prevailing party other than the

United States fees and other expenses, in addition to any costs

awarded pursuant to subsection (a), incurred by that party in

any civil action (other than cases sounding in tort) brought by

or against the United States in any court having jurisdiction of

that action, unless the court finds that the position of the

United States was substantially justified or that special cir-

cumstances make an award unjust.

(B) A party seeking an award of fees and other expenses

shall, within thirty days of final judgment in the action, submit

to the court an application for fees and other expenses which

shows that the party is a prevailing party and is eligible to

receive an award under this subsection, and the amount

sought, including an itemized statement from any attorney or

expert witness representing or appearing in behalf of the party

stating the actual time expended and the rate at which fees and

other expenses are computed. The party shall also allege that

the position of the United States was not substantially

justified.

be awarded pursuant to this subsection, or deny an award, to

the extent that the prevailing party during the course of the

proceedings engaged in conduct which unduly and un-

reasonably protracted the final resolution of the matter in

controversy.

(2) For the purposes of this subsection—

(A) “fees and other expenses”’ includes the reason-

able expenses of expert witnesses, the reasonable cost of

any study, analysis, engineering report, test, or project

which is found by the court to be necessary for the prepa-

ration of the party's case, and reasonable attorney fees

(The amount of fees awarded under this subsection shall

be based upon prevailing market rates for the kind and

quality of the services furnished, except that (i) no expert

witness shall be compensated at a rate in excess of the

highest rate of compensation for expert witnesses paid by

the United States; and (ii) attorney fees shall not be

awarded in excess of $75 per hour unless the court deter-

mines that an increase in the cost of living or a special fac-

tor, such as the limited availability of qualified attorneys

for the proceedings involved, justifies a higher fee.);

(B) “party” means (i) an individual whose net worth

did not exceed $1,000,000 at the time the civil action

was filed, (ii) a sole owner of an unincorporated business,

or a partnership, corporation, association, or organiza-

tion whose net worth did not exceed $5,000,000 at the

time the civil action was filed, except that an organization

described in section 501 (c) (3) of the Internal Revenue

Code of 1954(26 U.S.C. 501 (c)(3)) exempt from taxa-

tion under section 501 (a) of the Code and a cooperative

association as defined in section 15 (a) of the Agri-

cultural Marketing Act (12 U.S.C. 1141j(a)), may be a

party regardless of the net worth of such organization or

cooperative association, or (iii) a sole owner of an unin-

corporated business, ur a partnership, corporation,

association, or organization, having not more than 500

employees at the time the civil action was filed; and

official of the United States acting in his or her official

capacity.

(3) In awarding fees and other expenses under this subsec-

tion to a prevailing party in any action for judicial review of an

adversary adjudication, as defined in subsection (b) (1)(C) of

section 504 of title 5, United States Code, or an adversary

adjudication subject to the Contract Disputes Act of 1978, the

court shall include in that award fees and other expenses to the

same extent authorized in subsection (a) of such section,

unless the court finds that during such adversary adjudication

the position of the United States was substantially justified, or

that special circumstances make an award unjust.

Appendix B

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

STANLEY SPENCER, et ai.,

Plaintiffs, :

v. : Civil Action No.

THE NATIONAL LABOR : 79-2453

RELATIONS BOARD, et ai., :

Defendants :

ORDER

Upon consideration of plaintiffs’ motion for costs and attor-

neys’ fees pursuant to 28 U.S.C.S. § 2412, the memoranda of

points and authorities in support of and in opposition thereto,

the arguments of counsel, the affidavits and other supporting

documentation filed by the parties, and the entire record of

this action, it is by the Court this 28th day of May, 1°%2,

ORDERED that the motion for attorneys’ fees pursuant to

28 U.S.C.S. §2412(b), (d) be, and hereby is, denied; and

it is further

ORDERED that the motion for reimbursement of costs

associated with the prosecution of this civil action be, and

hereby is, granted; and it is further

ORDERED that plaintiffs will have until June 14, 1982, to

submit a separate bill of costs.

OPINION TO FOLLOW.

/s/ Norma Holloway Johnson

NORMA HOLLOWAY JOHNSON

UNITED STATES DISTRICT JUDGE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

STANLEY SPENCER, et ai.,

Plaintiffs, :

v. : Civil Action No.

THE NATIONAL LABOR : 79-2453

RELATIONS BOARD, et ai., :

Defendants :

ORDER

Upon consideration of the motion to dismiss on grounds of

mootness filed by defendant The National Labor Relations

Board, the response thereto, the arguments of counsel, and the

entire record of this case, it is by the Court this 28th day of

May, 1982,

ORDERED that the motion to dismiss be, and hereby is,

granted; and it is further

ORDERED that this action be, and hereby is, dismissed

with prejudice.

OPINION TO FOLLOW.

/s/ Norma Holloway Johnson

NORMA HOLLOWAY JOHNSON

UNITED STATES DISTRICT JUDGE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

STANLEY SPENCER, et ai.,

Plaintiffs, :

v. : Civil Action No.

THE NATIONAL LABOR : 79-2453

RELATIONS BOARD, et ai., :

Defendants :

MEMORANDUM OPINION

Defendant The National Labor Relations Board has

moved the Court to dismiss the instant action on grounds of

mootness. Plaintiffs do not oppose the motion to dismiss, but

have filed a motion for costs and attorneys’ fees pursuant to 28

U.S.C.S. §2412 (Law. Co-op. Supp. 1982), which codifies

portions of the recently enacted Equal Access To Justice Act,

Pub. L. No. 96-481, Title II, 94 Stat. 2325 (1980), effective

October 1, 1981. For the reasons stated herein, the Court

agrees that there is no longer a genuine case or controversy

underlying this litigation; accordingly, it will grant defen-

dant’s motion to dismiss the action. The Court has also con-

cluded that although plaintiffs are entitled to a judgment for

reasonable costs incurred in advancing this litigation, they are

not entitled to an award of attorneys’ fees under the Equal

Access To Justice Act. Plaintiffs’ application for fees will

therefore be denied.

I. The National Labor Relations Board’s Motion

To Dismiss As Moot

A. Background

Plaintiffs, a group of qualified engineers at the Utah Power

& Light Company in Salt Lake City, Utah, filed this action on

September 17, 1979, seeking, inter alia, a declaratory judg-

ment that they are “‘professional employees” within the mean-

ing of section 2(12) of the National Labor Relations Act, 29

U.S.C. § 152 (12) (1976) (hereinafter “the NLRA’’) and an

injunction requiring the National Labor Relations Board

(hereinafter ‘‘the NLRB” or “the Board’’) to either conduct a

decertification election in response to the petition that plain-

tiffs had previously filed with the Board,' or decide whether

they were in fact “professional employees’”’ entitled to vote

separately with respect to their previous inclusion in a

“mixed” bargaining unit. See 29 U.S.C. §159(b\(1).? On

November 16, 1979, the Board answered the complaint by

denying that plaintiffs were entitled to any of the relief request-

ed and maintaining, inter alia, that this Court lacked subject

matter jurisdiction over the case, and that plaintiffs had failed

to state a claim upon which relief could be granted. Thereafter

the parties filed cross-motions for summary judgment.

During the pendency of the respective motions for sum-

‘Board Case No. 27-RD-459.

*Section 9(b) (1) of the NLRA, 29 U.S.C. § 159(b) (1), prohibits the

Board from designating bargaining units composed of both professional

and non-professional employees “unless a majority of such professional

employees vote for inclusion in such unit . . . .” The “mixed’’ bargaining

unit challenged in this case was formed in 1938, almost ten years prior to

the passage of the Taft-Hartley amendments which included the above-

referenced provision.

mary judgment, two of the named plaintiffs in this action filed

a second petition for a decertification election on behalf of all

qualified engineers at the wholly unionized Utah Power and

Light Company.’ A hearing on that petition was held on April

10, 1981, and the matter was subsequently transferred di-

rectly to the Board for a disposition. On September 30, 1981,

the Board issued a decision and order finding that plaintiffs

qualified as “‘professional employees” under section 2(12) of

the NLRA and were entitled to a separate election on the issue

of continued union representation. See Utah Power & Light

Company, 258 NLRB 138 (1981); Exhibit B To The Board’s

Motion To Dismiss As Moot. The Board’s Regional Director

conducted an election on October 29, 1981, and the engineers

voted overwhelmingly against continued representation by

the incumbent union. Exhibit D To The Board’s Motion To

Dismiss As Moot.

B. The Mootness Issue

The fundamental principle that Article III courts lack juris-

diction to consider the merits of a moot case stems from the

constitutional command that the judicial power extends only

to actual “cases” or “controversies”. Powell v. McCormack,

395 U.S. 486, 496 n. 7 (1969); Sibron v. New York, 392 U.S.

40, 57 (1968). The mootness doctrine requires courts to dis-

miss cases where “‘the issues presented are no longer ‘live’ or

the parties lack a legally cognizable interest in the outcome.”

Powell v. McCormack, 395 U.S. at 496; see also Arizona

Electric Power Cooperative, Inc. v. Federal Energy Regu-

latory Commission, 203 U.S. App. D.C. 220, 226, 631 F.2d

‘Board Case No. 27-RD-535, Exhibit A To The Board’s Motion To

Dismiss As Moot.

802, 808 (1980); Reporters Committee for Freedom Of The

Press v. Sampson, 192 U.S. App. D.C. 335, 341, 591 F.2d

944, 950 (1978). Litigation ordinarily becomes moot “when-

ever it tenders for judicial resolution no more than an abstract

or hypothetical question.” Nader v. Butz, 154 U.S. App.

D.C. 178, 180, 474 F.2d 426, 428 (1972). This may occur

when events transpiring after the challenged action obviate or

preclude the possibility of meaningful relief. Public Media

Center v. Federal Communications Commission, 190 U.S.

App. D.C. 5, 429, 587 F.2d 1322, 1326 (1978); Alton &

Southern Railway Co. v. International Association of

Machinists & Aerospace Workers, 150 U.S. App. D.C. 36,

41-42, 463 F.2d 872, 877-78 (1972). In that respect, the

mootness doctrine requires dismissal whenever “1) it can be

said with assurance that there is no reasonable expectation...

that the alleged violation will recur, ...and2) interim relief or

events have completely and irrevocably eradicated the effects

of the alleged violation”. County of Los Angeles v. Davis, 440

U.S. 625, 631 (1979).

Each of the aforementioned conditions for invoking the

mootness doctrine have been satisfied here. Since the onset of

this civil action, plaintiffs have received from the Board all of

the relief that they sought in federal court; the Board has deter-

mined that they are “professional employees” as defined by

the NLRA, and has conducted a secret ballot decertification

election on their behalf. Thus, even assuming arguendo that

the Board’s earlier failure to adjudicate plaintiffs’ professional

status and to order a decertification election constituted an

actionable violation of a specific statutory prohibition, see

Leedom v. Kyne, 358 U.S. 184, 188-89 (1958), that putative

violation has been fully corrected by the Board’s intervening

decision to grant plaintiffs’ decertification petition. There is

no reasonable expectation that the alleged violation will recur,

and there is no longer a “‘case”’ or “controversy” justifying the

exercise of this Court’s decisional and remedial authority.

The Board’s motion to dismiss must be granted.

II. Plaintiffs’ Motion For Costs And Attorneys’ Fees

A. Costs

28 U.S.C. §2412(a) (1976) provides as follows:

Except as otherwise specifically provided by statute, a

judgment for costs as enumerated in section 1920 of this

title [28 U.S.C. § 1920], but not including the fees and

expenses of attorneys, may be awarded to the prevailing

party in any civil action brought by or against the United

States or any agency and any official of the United States

acting in his or her official capacity in any court having

jurisdiction of such action. A judgment for costs when

taxed against the United States shall, in an amount

established by statute, court rule, or order, be limited to

reimbursing in whole or in part the prevailing party for

the costs incurred by such party in the litigation.

It is manifestly clear under analogous cost-shifting statutes

that the phrase “prevailing party” should not be limited to

cases in which a party has prevailed through entry of final

judgment following a full trial on the merits. For example, the

Supreme Court has recently noted that a litigant may be regarded

as having “‘prevailed” for purposes of an award of costs and

attorneys’ fees under civil rights statutes even if the action is

settled by stipulation or consent decree rather than ad-

judicated on the merits. Maher v. Gagne, 448 U.S. 122

(1980);* see also Foster v. Boorstin, 182 U.S. App. D.C.

~~ "The fact that respondent prevailed through settlement rather than

through litigation does not weaken her claim to fees. Nothing in the

language of § 1988 conditions the District Court’s power to award

342, 561 F.2d 340 (1977). Moreover, several cases arising

both before and after the Maher decision have generally held

that it is sufficient for purposes of an award of costs and attor-

neys’ fees that the plaintiff succeeded on the “central issue”’ in

his complaint, or achieved some of his objectives by com-

promise. See e.g., Collins v. Thomas, 649 F.2d 1203, 1205

(Sth Cir. 1981); Young v. Kenley, 641 F.2d 192, 194-95 (4th

Cir. 1981); Watkins v. Mobile Housing Board, 632 F.2d

565, 567 (9th Cix. 1980); Bonnes v. Long, 599 F.2d 1316,

1318 (4th Cir. 1979); Bradford v. Blum, 507 F. Supp. 526,

529-30 (S.D.N.Y. 1981).

While plaintiffs in this action did not secure a favorable

decision on the merits of their central legal contention that the

Board’s denial of their initial decertification petition violated a

clear, controlling and specific provision of the NLRA, they

were ultimately successful in obtaining all of the relief that

they had sought in a judicial forum, namely, a finding by the

Board that they were indeed “‘professional employees” within

the purview of 29 U.S.C. §152(12), and a resultant decision

to afford them a separate decertification election. Even if

there was no causal nexus whatsoever between the actions of

the Board and the prosecution of this lawsuit by the plaintiffs,

the Court believes that the Board’s intervening decision to

effectively moot this action by granting plaintiffs the relief that

they had requested and the virtually voluntary dismissal that

has followed warrant the conclusion that plaintiffs are

“prevailing parties” under 28 U.S.C. §2412(a). This view

fees on full litigation of the issues or on a judicial determination that

plaintiff's rights have been violated. Jd at 129.

Although Maher v. Gagne was limited on its facts to a claim for attorneys’

fees pursuant to 42 U.S.C. § 1988, its liberal definition of a “prevailing

party”’ is easily transposed to other fee-shifting statutes outside the civil

rights domain.

fully accords with the trend in recent decisions toward an

expansive and liberalized approach to the definition of a

“prevailing party’’ under various fee-shifting and cost-

shifting statutes.

In view of the foregoing, the Court finds that plaintiffs are

entitled to a judgment for reasonable costs, excluding attor-

neys’ fees, incurred in advancing this civil action. An award of

costs will be contingent upon the filing of a separate bill of

costs. *

B. Attorneys’ Fees

Enacted as a three-year experiment in allocating the costs

of litigation involving the United States, *the Equal Access To

Justice Act (hereinafter “the EAJA’’) represents the most

extensive congressional assault on the gradually eroding for-

tress of the American Rule since the Supreme Court’s seminal

decision in Alyeska Pipeline Service Co. v. Wilderness

Society, 421 U.S. 240(1975).’ Like many ofits more specific

statutory predecessors,* the EAJA rejects the traditional

‘Of course, the Board retains the right to contest specific items that

plaintiffs may list in their bill of costs.

*The EAJA has a “sunset” provision repealing the law on October 1,

1984. 28 U.S.C.S. §2412 note; P.L. 96-481, Title II, § 204(c), 94 Stat.

2329 (1980).

"The Alyeska decision had limited the inherent power of courts to award

attorneys’ fees to prevailing parties, requiring that such awards be rooted

in common law exceptions to the American Rule or in specific statutory

authorization.

*Among the more recent federal fee-shifting statutes are Title II and VII

of the Civil Rights Act of 1964, 42 U.S.C. § §2000a-3(b), 2000e-5(k);

Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §3612(c); the

Freedom of Information Act, 5 U.S.C. §552(a)(4)(E); the Voting Rights

Act of 1965, as amended, 42 U.S.C. §19731(e); and the Civil Rights

Attorneys Fees Awards Act of 1976, 42 U.S.C. § 1988.

10b

American Rule, which generally prohibits fee-shifting unless

the suit was prosecuted in bad faith by the losing party, and

moves toward the central premise of the English Rule that fee

awards are “‘a proper allocation of the costs of the litigation

and a measure that lifts the cost deterrent facing the successful

litigant.” S&H Riggers & Erectors, Inc. v. Occupational

Safety & Health Review Commission, No. 79-2358, slip. op.

(Sth Cir. April 5, 1982) (available on LEXIS, Genfed

library, Cir. file).° In an effort to alleviate the economic bur-

dens faced by those who would challenge unreasonable

government action, Congress made two significant changes in

prior law. First, Congress codified existing common law

exceptions to the American rule by specifically authorizing

the courts to award fees and other expenses to prevailing par-

ties in civil litigation involving the United States, to the same

extent that fees and expenses can be awarded against private

parties. 28 U.S.C.S. §2412(b). The effect of this modifica-

tion is to make the United States potentially liable for fees

under the ‘“‘bad faith’, ‘“‘common fund” and “common

*The exception created by §.265 focuses primarily on those

individuals for whom cost may be a deterrent to vindicating their

rights. The bill rests on the premise that a party who chooses to

litigate an issue against the Government is not only representing his

or her own vested interest but is also refining and formulating public

policy. An adjudication or civil action provides a concrete, adver-

sarial test of Government regulation and thereby insures the

legitimacy and fairness of the law .. . The bill thus recognizes that the

expense of correcting error on the part of the Government should not

rest wholly on the party whose willingness to litigate or adjudicate

has helped to define the limits of Federal authority. Where parties

are serving a public purpose, it is unfair to ask them to finance

through their tax dollars unreasonable Government action and also

bear the costs of vindicating their rights.

H.R. REP. No. 1418, 96th Cong., 2d Sess 10 (1980), reprinted in 1980

U.S. CODE CONG. & AD. NEWS 4984, 4988-89.

11b

benefit” exceptions to the American rule. '°

In a second major departure from the American rule, Con-

gress established a general, nondiscretionary fee-shifting pro-

vision which enhances the prospects of certain parties who

have prevailed in civil litigation with the United States to

recover fees from the Government:!!

Except as otherwise specifically provided by statute, a

court shall award to a prevailing party other than the

United States fees and other expenses, in addition to any

costs awarded pursuant to subsection (a), incurred by

that party in any civil action (other than cases sounding in

tort) brought by or against the United States in any court

having jurisdiction of that action, unless the court finds

that the position of the United States was substantially

justified or that special circumstances make an award

unjust.

28 U.S.C.S. §2412(d\1)(A)." It is important to recognize

"There appears to be no justification for exempting the United

States in these situations; the change simply reflects the belief that,

at a minimum, the United States should be held to the same stan-

dards in litigating as private parties. As such, it is consistent with the

history of §2412 which reflects a strong movement by Congress

toward placing the Federal Government and civil litigants on a com-

pletely equal footing.

H.R. REP. No. 96-1418, supra, at 9, 1980 U.S. CODE CONG. & AD.

NEWS at 4987.

"'The Act defines “party” as an individual with a net worth of $1,000,-

000 or less, a company with a net worth of $5,000,000 or less, or a com-

pany with no more than 500 employees. 28 U.S.C.S. §2412 (d) (2) (B).

Plaintiffs clearly qualify as eligible parties under the statute. “United

States”’ is defined to include federal agencies and officers. 28 U.S.C.S.

§ 2412 (d) (2) (C). The NLRB obviously meets this definition.

"An analogous provision, 5 U.S.C.S. § 504 (a) (1), affords a similar

entitlement to attorneys’ fees and expenses to prevailing parties in adver-

sary adjudications at the federal agency level. That provision has no

applicability here.

12b

that this subsection, which provides the basis for plaintiffs’

claim for attorneys’ fees in this action, does not automatically

require the Government to compensate all prevailing parties

for fees and expenses. Instead, it adopts a compromise posi-

tion, embodied in the standard of “substantial justification”,

which “balances the constitutional obligation of the executive

branch to see that the laws are faithfully executed against the

public interest in encouraging parties to vindicate their

rights.”” H.R. REP. No 1418, supra, at 10, 1980 U.S. CODE

CONG. & AD. NEWS at 4989. In particular, Congress

rejected the liberal standard of recovery under the civil rights

statutes which generally entitled prevailing plaintiffs to

receive an award of attorneys’ fees unless special circumstan-

ces would render an award unjust. See Newman v. Piggie

Park Enterprises, Inc., 390 U.S. 400, 402 (1968). At the

same time, however, Congress rejected a standard proposed

by the Department of Justice which would have authorized

recovery of fees and expenses against the Government only if

a prevailing party could prove that the Government’s position

was arbitrary, frivolous, unreasonable, or groundless. H.R.

REP, No. 1418, supra, at 10, 14, 1980 U.S. CODE CONG.

& AD. NEWS at 4989, 4992-93.'* Such a restrictive

approach, Congress reasoned, would maintain significant

barriers to recovery of fees by prevailing litigants, and would

not appreciably diminish existing deterrents created by the

high cost of vindicating legal rights in the face of arbitrary and

unreasonable government action. Jd.

The standard of recovery that ultimately emerged in section

In other words, Congress refused to adopt the standard governing fee

awards against plaintiffs in Title VII cases, where to avoid an award of

attorneys’ fees a plaintiff need only establish that his lawsuit was non-

frivolous. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412,

420-21 (1978).

13b

2412(d) (1) (A) represents a “‘middle ground” between an

automatic award of fees to a prevailing party engaged in litiga-

tion with the United States and the standard proposed by the

Department of Justice. Although the EAJA is silent on the

meaning of the “‘substantially justified’ standard, the House

Report contains an instructive passage:

The test of whether or not a Government action is sub-

stantially justified is essentially one of rasonableness.

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. This allocation of the burden, in

fact, reflects a general tendency to place the burden of

proof on the party who has readier access to and

knowledge of the facts in question. The committee

believes that it is far easier for the Government, which

has control of the evidence, to prove the reasonableness

of its action than it is for a private party to marshal the

facts to prove that the Government was unreasonable.

The standard, however, should not be read to raise a

presumption that the Government position was not sub-

stantially 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 sub-

stantial probability of prevailing.

H.R. REP. No. 1418, supra, at 10-11, 1980 U.S. CODE

CONG & AD. NEWS at 4989-90; see also S. REP. No.

253, 96th Cong., 2d Sess. 6-7 (1980).

In light of this congressional explanation of the governing

standard for recovery of attorneys’ fees under the EAJA, it

appears that the NLRB retains the burden of demonstrating

that its position in this dispute was legally and factually

14b

reasonable. After carefully considering the extensive memo-

randa filed by the parties on this question and the oral

arguments of counsel, the Court is of the opinion that the

Board has satisfied its statutory burden. Since there was a

reasonable basis in law and fact for the Board’s position at the

administrative and judicial stages of this controversy,'* the

Court finds it unnecessary to address the alternative argu-

ments raised by the Board in opposition to plaintiffs’ applica-

tion for costs and fees. A genuine jurisdictional dispute

existed between the parties, and the Board has carried its bur-

den of showing a reasonable basis in law and in fact for its

litigation posture.

1. The NLRB’s Initial Refusal To Grant Plaintiffs’

Decertification Petition

Section 9(c) (1) of the NLRA, 29 U.S.C. §159(c) (1),

accords the Board full authority to determine whether a peti-

tion for a representation election filed by an employer, a labor

organization or a group of employees raises a sufficient “ques-

‘There appears to be some dispute over whether the “‘position’’ requir-

ing substantial justification refers to the litigation posture of the United

States or to the substantive position that generated the civil action. See

Alspach v. District Director of Internal Revenue, 527 F. Supp. 225, 228

(D. Md. 1981) (statute refers to the Government's actions or position in

prosecuting or defending litigation, not to its actions upon which suit is

based). Contra, Photo Data, Inc. v. Sawyer, No. 81-2435, slip op. at 6-7

(D.D.C. Feb. 22, 1982); Constantino v. United States, No. 81-1571,

slip. op. at 4(E.D. Pa. Dec. 2, 1981) (court must scrutinize not only the

Government's theory in defending against litigation, but also the actions

and positions that caused plaintiff to bring the lawsuit). Although the latter

view seems to be more consistent with the remedial objectives of the

EAJA, the Court finds that the NLRB’s reason for rejecting the first decer-

tification petition and its jurisdictional argument in this litigation were both

substantially justified within the meaning of the Act.

15b

tion of representation affecting commerce’”’ to justify a formal

representation election. If the Board decides that a substantial

question of representation exists, it is required to direct an

election by secret ballot in an appropriate bargaining unit

designed ‘‘to assure to employees the fullest freedom in exer-

cising the rights guaranteed by [the NLRA].. .” 29 U.S.C.

§159(b). One of the most significant limitations on the

Board’s discretionary authority to determine and recognize

bargaining units as a prelude to representation elections is

contained in section 9(b)(1), which prohibits the Branch from

deciding that any unit is appropriate “if such unit includes

both professional employees and employees who are not pro-

fessional employees unless a majority of such professional

employees vote for inclusion in such unit... .”’'* 29 U.S.C.

§ 159(b) (1).

Although both the language and the legislative history of

section 9(b) (1) indicates that professional employees are

entitled to vote separately on whether or not they desire to be

included in a mixed bargaining unit of professional and non-

professional employees, the Board initially denied plaintiffs’

petition for a separate decertification election without deter-

"Section 2(12) of the NLRA, 29 U.S.C. §152(12), defines “pro-

fessional employee”’ as follows:

(a) any employee engaged in work (i) predominantly intellectual

and varied in character as opposed to routine mental, manual,

mechanical or physical work; (ii) involving the consistent exer-

cise of discretion and judgment in its performance; (iii) of such a

character that the output produced or the result accomplished can-

not be standardized in relation to a given period of time; (iv) requir-

ing knowledge of an advanced type in a field of science or learning

customarily acquired by a prolonged course of specialized intellec-

tual instruction and study in an institution of higher learning or a hos-

pital, as distinguished from a general academic education or from an

apprenticeship or from training in the performance of routine men-

tal, manual, or physical processes.

16b

mining whether they qualified as ‘professional employees”

because the proposed decertifying unit of one hundred

engineers was not coextensive with the employer unit that had

been recognized since 1938. See Supplemental Memoran-

dum In Support Of The National Labor Relations Board’s

Opposition To Plaintiffs’ Motion For Costs And Attorney

Fees, at 9. The Board reasoned that the Supreme Court’s

reference to section 9(b) (1) as a “clear and mandatory” pro-

vision, see Leedom v. Kyne, 358 U.S. at 188-89, was not

designed to afford professional employees a vested right to

disrupt an existing bargaining relationship for the sole pur-

pose of being unrepresented. Memorandum In Support Of

The National Labor Relations Board’s Opposition To Plain-

tiffs’ Motion For Costs And Attorney Fees, at 2 n. 1. Neither

was the Kyne decision intended to divest the Board of the

traditional discretion that it exercised in the context of rep-

resentation proceedings to properly balance the twin statutory

‘ goals of promoting freedom of choice in the workplace and

maintaining stable bargaining relationships. See 29 U.S.C.

§ 151 (1976). Thus, the Board concluded that while it would

continue to order a separate election for professionals as a pre-

condition to recognizing any new bargaining unit composed of

both professional and non-professional employees, it would

not utilize the section 9(b) (1) proviso as a weapon to fracture

existing representational units.

The Board’s practice of ordinarily refusing to direct a decer-

tification election in a unit that is not coextensive with an

existing bargaining unit can be traced to its seminal decision in

Westinghouse Electric Corporation, 115 NLRB 530(1956),

which relied upon statutory interpretation and policy con-

siderations in dismissing a petition to decertify an incumbent

union from representing the professional employees in an

established bargaining unit that included both professional

17b

and non-professional employees. In Westinghouse the Board

concluded that section 9(c) (1) (A) of the NLRA did not

require it “to conduct a decertification election on the basis of

a petition which seeks to raise a question concerning represen-

tation with respect to only part of an existing unit.” Jd. at 532.

Rather, the section was designed solely ‘‘to provide a

method for determining whether an existing unit of employees

desire to continue their current representation ....”’ Jd. At the

same time, the Board interpreted section 9(b) (1) as mandat-

ing a separate representation election for professional em-

ployees only when an election was being simultaneously

sought in a mixed unit composed of both professionals and

non-professionals. By contrast, the representation filed in

Westinghouse, no less than the petition that plaintiffs filed

with the Board’s Regional Office prior to the commencement

of this action, sought to decertify an incumbent union and pre-

clude it from representing only the professional employees in

a mixed bargaining unit that has been firmly established for

over forty years. On the basis of that distinction, the Board

concluded that “‘no statutory mandate requires the Board to

direct a decertification election in only a segment of an exist-

ing unit, even though the employees in that segment are pro-

fessional employees.” Jd.

Finally, the Board’s refusal to authorize a partial decer-

tification election in Westinghouse was based on its con-

sidered view of appropriate national labor policy. Thus, the

Board reasoned that “although the desirability of according

specialized representation to specialized groups of employees

is sufficient to warrant disrupting an existing relationship

when separate representation is sought, such considerations

are not operative in a decertification proceeding which does

not result in separate representation for purposes of collective

bargaining.” Jd. at 533. See also Campbell Soup Company,

18b

111 NLRB 234 (1955) (same practice followed for craft

severance questions under section 9(b) (2)).

While the Court does not necessarily accept the Board’s

view of the limits of section 9(b) (1) and the appropriate

balance between the specialized needs of professional em-

ployees and the continued viability of existing bargaining

units,'® it is convinced that there was at least a reasonable

basis for the Board’s initial decision to follow its consistent

interpretation of statutory and policy requirements"’ in deny-

ing plaintiffs’ decertification petition. In this case, a group of

engineers requested a decertification election encompassing

only the professional component of a mixed bargaining unit

that had been operative for over forty years. The Board denied

the petition on the basis of its established rule that decertifica-

tion elections are appropriate only in a unit that is coextensive

with the previously recognized or certified unit.'* Despite

‘In any event, the Ccurt is barred by constitutional limitations from

expressing either agreement or disagreement with the challenged

practice.

"See, e.g., Westinghouse Electric Corporation, 111 NLRB 497

(1955); S.S. White Dental Mfg. Co., 109 NLRB 1117 (1954); Union

Switch & Signal Co., 76 NLRB 205 (1948) (Board will grant professional

employees a separate 9(b) (1) vote on RC-petition of rival union seeking

to sever professionals from established mixed unit). See also Westinghouse

Electric Corporation, 129 NLRB 846 (1960); Westinghouse Electric

Corporation, 116 NLRB 1545 (1956) (Board will grant professional

employees a separate 9(b) (1) vote on RM-petition of either an employer

or a union seeking a representation election in a proposed mixed unit).

'*The fact that the inclusion of the engineers in a mixed unit preceded the

enactment of section 9(b) (1) is not dispositive, for the Board’s disapproval

of partial decertification has applied not only to mixed units that have been

certified by the Board after a section 9(b) (1) vote, but also to units in which

professionals have been included voluntarily by an employer and union for

an extended period of time. See Great Falls Employers Council, Inc., 114

NLRB 370 (1955) (mixed unit recognized by employer for some time). In

19b

plaintiffs’ contention that the Board’s “‘pro-unionism stance

eviscerates the meaning of free choice embodied in section 7

of the NLRA,”’!’ there is nothing in the challenged practice

which prohibits professional employees in an established

mixed unit from exercising their right of self-determination,

even at the expense of bargaining stability, in an appropriate

representation proceeding. *° Whether the Board’s distinction

between representation petitions brought by professionals in

a mixed unit and decertification petitions brought by those

same individuals merits judicial approval in light of the

language of section 9(b) (1) is not determinative here; the only

relevant point is that the position adopted by the Board has a

reasonable basis in law and in fact.

It is generally conceded that the effective administration of

our national labor laws requires the Board to exercise a more

pronounced policymaking function than a court would ordinarily

exercise in demarcating legal rights through concrete adver-

sary adjudications. That the Board has chosen to develop

rules and practices governing labor relations through adjudica-

tive rather than rulemaking proceedings cannot obscure the

fact that Congress has entrusted the Board with a significant

residuum of discretion to formulate national labor policy

both cases, the Board has determined that the important statutory policy of

maintaining stable bargaining relationships - a policy not present in

Leedom v. Kyne - prohibits professional employees from fracturing an

established bargaining unit solely for the purpose of being unrepresented.

Westinghouse Electric Corporation, 115 NLRB at 533.

‘Reply Brief Of Plaintiffs In Support Of Their Application Under The

Equal Access To Justice Act, at 13.

See ITT Corporation, 159 NLRB 1757, 1759-64 (1966), enf‘d, 382

F.2d 366, 370 (3d Cir. 1967), cert. denied, 389 U.S. 1039 (1968) (Pro-

fessionals in mixed bargaining unit not foreclosed from pursuing self-

determination “at an appropriate time and in an appropriate proceeding,”

despite long bargaining history in a mixed unit).

20b

within the broad interstices of the statute. One need not

pejoratively characterize the Board as a politically pliable

agency to recognize that existing Board precedent is in-

evitably, and necessarily, subject to some modification as the

composition of the Board changes in response to electoral

developments. A new national administration may have a

decidedly different view of the appropriate balance between

the statutory values of free choice and bargaining stability

than its immediate predecessor, and the composition of the

Board may ultimately tend to reflect that view. Ironclad

adherence to the doctrine of stare decisis in all adjudicatory

proceedings before the Board would severely inhibit the

salutary efforts of a reconstituted Board to modify existing

rules and practices in the face of changing national percep-

tions and the Board’s own evolving experience with the actual

effects of those rules and practices.

Largely for these reasons, the Court does not believe that

the Board’s subsequent decision in a second decertification

proceeding to afford plaintiffs a separate election on the

appropriateness of the mixed bargaining unit at Utah Power &

Light Company makes the theory underlying the Board’s

denial of the initial decertification petition unreasonable and

unjustified. In granting plaintiffs’ second decertification peti-

tion, the Board reaffirmed the policies underlying Westinghouse

Electric Corporation and specifically stated that it generally

would continue to require that the unit for decertification be

coextensive with the existing unit. However, in light of “this

unique situation” in which the professional employees seek-

ing decertification had never had an opportunity to vote in a

self-determination election,”' the Board decided to exercise

2'The reason, of course, is that the mixed unit had been certified by the

board as a result of voluntary recognition by the employer long before sec-

tion 9(b) (1) was adopted by Congress.

21b

its considerable discretion and make an exception to the prin-

ciple that had motivated its denial or plaintiffs’ first decer-

tification petition. This change of position is nothing more

than a modification of a uniform rule in the face of extenuating

circumstances. It hardly constitutes a de facto admission that

the Board’s initial disapproval of the decertification petition

violated a “‘clear and mandatory”’ provision of the NLRA suf-

ficient to create jurisdiction in this Court; neither does it indi-

cate that a genuine dispute did not exist in the first decerti-

fication proceeding over the appropriateness of disrupting a

stable bargaining relationship that had endured for over forty

years. An award of attorneys’ fees in this case would simply

not “account for the reasonable and legitimate exercise of

[discretionary] functions,”?? by the NLRB; its position,

however problematical on the merits, was substantially jus-

tified within the meaning of the EAJA.

2. The “Bad Faith” Exception

Although 28 U.S.C.S. §2412(b) authorizes an award of

attorneys’ fees against the United Stutes under the so-called

“bad faith” exception to the American Rule, the Court finds

no basis for any contention that the Board acted in bad faith,

vexatiously, wantonly or for oppressive reasons at either the

agency or the judicial level. Accordingly, plaintiffs are not

entitled to an award of fees under this subsection.

7H.R. REP. No. 1418, supra, at 14, 1980 U.S. CODE CONG. &

AD. NEWS at 4992.

22b

An Order consistent with this Memorandum Opinion has

been issued.

/s/ Norma Holloway Johnson

NORMA HOLLOWAY JOHNSON

UNITED STATES DISTRICT JUDGE

DATED: July 1, 1982

Appendix C

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 82-1851

STANLEY SPENCER, ET AL., APPELLANTS

Vv.

NATIONAL LABOR RELATIONS BOARD, ET AL.

Appeal from the United States District Court

for the District of Columbia

(D.C. Civil Action No. 79-2453)

Argued March 22, 1983

Decided June 28, 1983

Michael E.. Avakian for appellants.

David R. Marshall, Attorney, National Labor Relations

Board, of the Bar of the District of Columbia, pro hac

vice, by special leave of the Court, with whom Elliott

Moore, Deputy Associate General Counsel, and Aileen A.

Armstrong, Assistant General Counsel, National Labor

Relations Board, were on the brief, for appellees.

Bills of costs must be filed within 14 days after entry of judgment. The

court looks with disfavor upon motions to file bills of costs out of time.

Before: MIKVA and EDWARDS, Circuit Judges, and

SwyYGERT,* Senior Circuit Judge, United States

Court of Appeals for the Seventh Circuit.

Opinion for the Court filed by Circuit Judge EDWARDS.

TABLE OF CONTENTS

Page

Ca ienaiintadeaibauns 8

i aaucabibanunes 3

II]. THE EQUAL ACCESS TO JUSTICE ACT ..............000. 7

PN SRST SRA es REO EE 7

B. “The Position of the United States” .............. 18

Dh 2 I is ioctncenintnensesbainsersceniseene 16

2. A Practicable Definition ............................ 21

C, “Babatantialiy TestIBed” ........000.ccccsceeccces00000000 37

D. The Standard of Appellate Review ................. 46

II]. THE MERITS OF THE APPELLANTS’ PETITION........ 54

A. Section 2412(d) (1) (A) .................... Eta 55

Bi NR MII «. - ccinncissnsniebehingniatnnbeaniobasidiane 62

I aa scealichemnileieienceepanibieimmbeipian 62

* Sitting by designation pursuant to 28 U.S.C. § 294(d)

(Supp. V 1981).

Epwarps, Circuit Judge: The appellants, a group of

electrical and mechanical engineers employed by an elec-

tric utility company, seek attorneys’ fees from the Na-

tional Labor Relations Board (“NLRB” or “Board”’) for

legal expenses incurred in the course of their ultimately

successful quest for a separate representation election.

The appellants rely on section 204(a) of the Equal Access

to Justice Act (“EAJA” or “the Act”), 28 U.S.C. § 2412

(Supp. V 1981), which provides, inter alia, that, in a suit

brought by or against the United States, the court shall

award attorneys’ fees to a private prevailing party who

satisfies certain financial eligibility requirements, unless

“the position of the United States was substantially justi-

fied or . . . special circumstances make an award un-

just.” The District Court found that the appellants met

the eligibility requirements and had “prevailed” within

the meaning of the Act. The court denied their applica-

tion for attorneys’ fees, however, on the ground that the

position taken by the Board was substantially justified.

The appellants contest the latter ruling.

Resolution of this appeal necessitates an inquiry into

the theory and practice of the EAJA. We begin by con-

struing two crucial, ambiguous phrases used in the Act—

“the position of the United States” and “substantially

justified.” Next, we consider the standard of review by

which a court of appeals should scrutinize a trial judge’s

determination of a party’s entitlement to fees. We then

bring our analysis to bear on the District Court’s judg-

ment in the case before us. We conclude that the court’s

findings and rulings were proper and accordingly affirm.

I. BACKGROUND

In 1988, the Utah Power and Light Company (“the

Company”) voluntarily recognized Local 57 of the In-

ternational Brotherhood of Electrical Workers (“the Un-

1 The pertinent provisions of the Act are set forth in notes

18-24 infra and explicated in the accompanying text.

ion”) as the exclusive bargaining representative of its

employees. The Company and Union agreed that the bar-

gaining unit would consist of all employees except man-

agement personnel and supervisory officials with the au-

thority to hire and fire. Included in the unit, conse-

quently, were non-supervisory engineers. The NLRB as-

sented to the parties’ “stipulation” and certified the

Union.’

By 1978, there were 2,600 employees in the bargaining

unit, approximately 100 of whom were highly educated

electrical or mechanical engineers. During that year, 72

of the engineers filed a petition with the Board, seeking

decertification of the Union as their bargaining repre-

sentative. In support of their request, they argued that,

as professional employees, section 9(b) of the National

Labor Relations Act (as amended) guaranteed them a

right to vote as a separate group regarding union repre-

sentation.? Regional Director Francis Spearandeo dis-

missed the engineers’ petition, on the ground that “[t]he

Board’s established policy and general rule is that the

unit appropriate in a decertification election must be co-

extensive with the unit previously certified or the unit

? Certification, Utah Power & Light Co., XXII-R-20 (Sept.

80, 1988), reprinted in Appendix (“App.’”’) 15.

* The provision relied upon by the engineers reads in per-

tinent part:

The Board shall decide in each case whether, in order

to assure to employees the fullest freedom in exercising

the rights guaranteed by this subchapter, the unit appro-

priate for the purposes of collective bargaining shall be

the employer unit, craft unit, plant unit, or subdivision

thereof: Provided, That the Board shall not (1) decide

that any unit is appropriate for such purposes if such unit

includes both professional employees and employees who

are not professional employees unless a majority of such

professional employees vote for inclusion in such unit ....

29 U.S.C. § 159(b) (1976). The crucial proviso was added in

1947 by the Taft-Hartley Act, ch. 120, § 101, 61 Stat. 136, 143.

recognized.””* The Board denied the engineers’ petition /

for review of the dismissal. <

In 1979, the engineers amended their petition to re-

quest clarification of the scope of the bargaining unit.

The Regional Director dismissed this petition as well, on

the ground that the engineers constituted neither a labor

organization nor an employer and therefore lacked stand-

ing under the Board’s regulations® to petition for unit

clarification.®

Having failed to secure relief from the NLRB, the

engineers sought the aid of the judiciary. In September

1979, they brought suit in the District Court for the Dis-

trict of Columbia against both Spearandeo and the Board.’

They requested a declaration that they were indeed “pro-

fessionals” within the meaning of section 2(12) of the

National Labor Relations Act* and an injunction com-

pelling the Board to provide them a separate representa-

tion election. The Board admitted most of the factual

allegations in the complaint, but responded that the engi-

neers nevertheless had failed to state a claim on which

relief could be granted and that the District Court lacked

subject matter jurisdiction over the controversy.” The

parties then filed cross-motions for summary judgment.

* Decision and Order, No. 27-RD-459 (Dec. 22, 1978), re-

printed in App. 22.

5 29 C.F.R. § 102.60(b) (1978) (revised as of July 1, 1978).

* Decision and Order, No. 27-UC-52 (Jan. 80, 1979), re-

printed in App. 26.

7 Regional Director Spearandeo is now deceased, (And, in

any case, he could only be joined as a defendant in the suit

as a representative of the NLRB.) Consequently, the defend-

ants will be referred to collectively hereinafter as “the Board.”

* The definition of “professional employee” relied upon by

the engineers is set forth in 29 U.S.C. § 152(12) (1976).

* Answer at 8 (Nov. 16, 1979), reprinted in App. 29. The

arguments the Board subsequently advanced in support of

In 1980, while the case was pending in the District

Court, two of the engineers filed a second decertification

petition with the Board. This time the Board acceded to

the petitioners’ request. Utah Power & Light Co., 258

N.L.R.B. 1059 (1981). The Board reasoned that the situ-

ation was “unique” insofar as “the professional employ-

ees seeking decertification have never had an opportunity

to vote in a self-determination election”; under these spe-

cial circumstances, it decided, “the policies inherent in

Section 9(b)(1)” warranted making an “exception” to

the general rule (which it reaffirmed) that a decertifica-

tion election will not “normally” be ordered “in a unit not

coextensive with the existing unit.” Jd. at 1061 (footnote

omitted).

The long-sought-after election was held on October 29,

1981, and the engineers voted overwhelmingly against

continued representation by the Union. Eight days later,

the Board moved to dismiss as moot the engineers’ com-

plaint. The engineers did not contest the motion, respond-

ing instead with an application for costs and attorneys’

fees under the EAJA. The Board filed a memorandum

opposing the application.

On May 28, 1982, the District Court granted the

Board’s motion to dismiss. Finding that the engineers

qualified as “prevailing parties,” the court granted their

motion for costs..° The court ruled, however, that the

engineers were not entitled to attorneys’ fees under either

of the two arguably relevant provisions of the EAJA:

first, since the engineers had not shown that the Board

had acted in “bad faith,” they were not entitled to an

award of fees under section 2412(b); second, since the

Board had sustained its burden of showing that its posi-

these two defenses (and the strength thereof) are considered

in Part III. infra.

1° The provision relied upon by the court in awarding costs

was 28 U.S.C. § 2412(a) (Supp. V 1981). The pertinent por-

tions of this provision antedate the EAJA.

tion was “substantially justified,” appellants were pre-

cluded from receiving an award of fees under section

2412(d) (1) (A).”

On appeal, no party contests the dismissal of the suit

itself, the finding that the engineers constituted ‘“prevail-

ing parties,” or the allocation of costs. The engineers

challenge the denial of attorneys’ fees.

II. THE EQUAL ACCESS TO JUSTICE ACT

A. Introduction

The background against which the Equal Access to Jus-

tice Act must be viewed is the so-called “American Rule”

pertaining to the allocation of costs of counsel. Under

that longstanding doctrine, each litigant ordinarily must

pay his own lawyer. Alyeska Pipeline Service Co. v. Wil-

derness Society, 421 U.S. 240, 247 (1975). The rule has

only two narrow exceptions: when a loser “has acted in

bad faith, vexatiously, wantonly, or for oppressive rea-

sons,” he may be obliged to reimburse the winner for his

attorneys’ fees, F.D. Rich Co. v. United States, 417 U.S.

116, 129 (1974) (dicta) ; accord Lipsig v. National Stu-

11 Memorandum Opinion at 11-19 (filed July 1, 1982, explain-

ing the basis of the May 28 Order), reprinted in App. 200-08.

The two statutory provisions construed by the court are set

forth in notes 19, 22 infra, In ruling that the Board’s position

was “substantially justified,” the court declined to determine

whether the relevant “position” was the stance taken by the

Board in litigation or its original responses to the engineers’

requests, holding that the Board could not be held liable for

attorneys’ fees under either theory. /d. at 12 n.*, reprinted in

App. 201.

12 The doctrine currently prevailing in England and in most

of the rest of the world is that attorneys’ fees ordinarily are

awarded to the winning party. See Alyeska, 421 U.S. at 247

& n.18; Comment, Court Awarded Attorney’s Fees and Equal

Access to the Courts, 122 U. Pa. L, Rev. 686, 687 & n.8, 689-40

(1974).

dent Marketing Corp., 663 F.2d 178, 180 (D.C. Cir.

1980) (per curiam) ; and, when an individual litigant, by

successfully maintaining a suit, has conferred a benefit

on a group of persons, the court may allow him to re-

cover his attorneys’ fees from the beneficiaries, Mills v.

Electric Auto-Lite Co., 396 U.S. 875, 392-97 (1970)."

Traditionally, the United States was even less vulnerable

to an award of attorneys’ fees than a private litigant; in

the absence of an express statutory provision, even the

aforementioned “bad faith” and “common benefit” rules

could not be invoked against the federal government.

Pealo v. Farmers Home Administration of the United

States Department of Agriculture, 562 F.2d 744, 748

(D.C. Cir. 1977) (alternative holding); Rhode Island

Committee on Energy v. General Services Administration,

561 F.2d 397, 405 (1st Cir. 1977). The protection from

liability for attorneys’ fees enjoyed by the United States

under these circumstances derived from two sources: the

general doctrine of sovereign immunity; and 28 U.S.C.

§ 2412, which, prior to its amendment by the EAJA, was

“consistently construed as immunizing the United States

4* The way this rule usually works in practice is that the

court devises some arrangement whereby the individual litigant

is able to recover his attorneys’ fees from the “common fund”

he has created or preserved. When the common benefits se-

cured by the suit are nonpecuniary or are not embodied in a

discrete fund, the court may order the beneficiaries or their

representative to reimburse the prevailing party directly for

his costs of counsel. See Mills v. Electric Auto-Lite Co., 396

U.S. at 392-96; Note, The Award of Attorney's Fees Under

the Equal Access to Justice Act, 11 Horstra L. REv. 307, 309

(1982).

In one other unusual circumstance, attorneys’ fees have tra-

ditionally been recoverable: “[1I]n a civil contempt action oc-

casioned by willful disobedience of a court order an award of

attorney's fees may be authorized as part of the fine to be

levied on the defendant.” Fleischmann Distilling Corp. v.

Maier Brewing Co., 386 U.S. 714, 718 (1967) (dicta) (citing

Toledo Scale Co. v. Computing Scale Co., 201 U.S. 899, 426-28

(1928) ).

against attorney’s fees awards absent clear or express

statutory authority to the contrary.” NAACP v. Civiletti,

609 F.2d 514, 516 (D.C. Cir. 1979), cert. denied, 447 U.S.

922 (1980).

Since at least the 1920s, the restrictive American doc-

trine pertaining to the allocation of attorneys’ fees has

been subjected to persistent attack. In the 1960s and

early 1970s, federal courts sensitive to these criticisms

began to experiment with various alternative, more lib-

eral, fee-shifting rules. The most important of these de-

velopments was the so-called “private attorney general”’

theory, under which prevailing parties were allowed to

recover attorneys’ fees when their suits resulted in en-

forcement of “important societal rights.”"* In 1975, in

4 See, e.g., Ehrenzweig, Reimbursement of Counsel Fees

and the Great Society, 54 CALIF. L. REv. 792 (1966) ; Goodhart,

Costs, 38 YALE L.J. 849 (1929); Kuenzel, The Attorney's Fee:

Why Not a Cost of Litigation?, 49 lowa L. REv. 75 (1963) ;

Mause, Winner Takes All: A Re-Examination of the Indem-

nity System, 55 Iowa L, REv. 26 (1969); McCormick, Counsel

Fees and Other Expenses of Litigation as an Element of Dam-

ages, 15 MINN. L. REv. 619 (1981); Stoebuck, Counsel Fees

Included in Costs: A Logical Development, 38 U. CoLo. L.

REv. 202 (1966); Note, Attorney’s Fees, 48 Miss. L.J. 238

(1972) ; Note, Attorney’s Fees as an Element of Damages, 15

U. Cin. L. Rev. 313 (1941); Comment, Court Awarded

Attorney's Fees, supra note 12, at 648-55; Note, Attorney’s

Fees: Where Shall the Ultimate Burden Lie?, 20 VAND. L.

REV. 1216 (1967); Note, Distribution of Legal Expense Among

Litigants, 49 YALE L.J. 699 (1940).

1% See Note, Attorney’s Fees Under the EAJA, supra note

138, at 309-10; Comment, Court Awarded Attorney’s Fees, su-

pra note 12, at 657, 666-70. The doctrine of sovereign im-

munity (buttressed by 28 U.S.C. § 2412, see text following note

13 supra) precluded the recovery of attorneys’ fees from the

federal government under this theory. See Comment, Court

Awarded Attorney’s Fees, supra note 12, at 679 & n.255. How-

ever, the inequity and frustration of public policy caused by

that preclusion was mitigated by the fact that, in many of the

suits against the United States or its officials in which the

10c

the Alyeska case, the Supreme Court called a halt to this

judicially managed doctrinal innovation. The Court con-

cluded that, in view of the importance and complexity of

the field and of the history of legislative involvement, “it

is apparent that the circumstances under which attorneys’

fees are to be awarded and the range of discretion of the

courts in making those awards are matters for Congress

to determine.” 421 U.S. at 262 (footnote omitted). Con-

sequently, it held that, in the absence of specific statutory

authorization, federal courts sitting in non-diversity cases

could award attorneys’ fees to prevailing parties only un-

der the established common law exceptions to the Ameri-

can Rule. Id. at 247, 257-60, 271.

The Supreme Court’s message was not lost on the leg-

islature. A year after the Alyeska decision, Congress

passed the Civil Rights Attorney’s Fees Awards Act,

which allows prevailing parties in suits brought under

specified civil rights statutes to recover “a reasonable

attorney’s fee as part of the costs.” '* The Equal Access

to Justice Act, passed four years later,’’ constitutes an

even more comprehensive response to the Supreme Court’s

invitation and self-abnegation. The Act applies to all

civil actions brought by or against the United States '*

theory might have been invoked, private parties were joined as

co-defendants. In such circumstances, the plaintiffs’ costs of

counsel (or some portion thereof) could be—and frequently

were—recovered from the private defendants.

16 Pub. L. No. 94-559, 90 Stat. 2641 (1976) (codified as

amended at 42 U.S.C. § 1988 (Supp. V 1981)).

17 Pub, L. No. 96-481, §§ 201-208, 94 Stat. 2821, 2325-30

(1980). The portions of the Act pertaining to awards by

administrative agencies pf attorneys’ fees incurred in the

course of adjudicatory proceedings before them are codified

at 5 U.S.C. $504 (Supp. V 1981). The portions pertaining

to awards of fees by courts are codified at 28 U.S.C. § 2412

(Supp. V 1981).

1828 U.S.C. $§ 2412(b), (d) (1) (A) (Supp. V 1981). The

only exception to this comprehensive coverage is that “cases

lle

and allows private prevailing parties to recover attorneys’

fees from the government in a wide variety of circum-

stances.

Two provisions of the statute are crucial in the present

case. Section 2412(b) authorizes courts to award pri-

vate prevailing parties “reasonable fees and expenses of

attorneys,” except when such awards are “expressly pro-

hibited by statute,” and declares that “(t]he United

States shall be liable for such fees and expenses to the

same extent that any other party would be liable under

the common law or under the terms of any statute which

specifically provides for such an award.” '* The most

sounding in tort” are excluded from the experimental pro-

visions of § 2412(d)(1)(A). See notes 22-23 infra and

accompanying text.

Both the Civil Rights Attorney’s Fees Awards Act, see

note 16 supra, and the EAJA were designed to supplement

a host of more specific provisions allowing for the award of

attorneys’ fees in suits brought under statutes granting or

protecting various federal rights. Sev, e.g., 5 U.S.C. § 552(a)

(4)(E) (1976) (Freedom of Information Act); 15 U.S.C.

§15 (Supp. V 1981) (Clayton Act); 15 U.S.C. § 77k(e)

(1976) (Securities Act of 1933 [as amended]); 15 U.S.C.

§§ 78i(e), 78r(a) (1976) (Securities Exchange Act of 1934

[as amended] ) ; 29 U.S.C. § 107(e) (1976) (Norris-LaGuardia

Act); 42 U.S.C. §§ 2000a-3(b), 2000e-5(k) (1976) (Civil

Rights Act of 1964). For a comprehensive, current enumera-

tion of these provisions, see 46 ATTORNEY FEE AWARDS REP.

No. 3, at 2-3 (1983).

'® The full text of the provision reads:

Unless expressly prohibited by statute, a court may

award reasonable fees and expenses of attorneys, in addi-

tion to the costs which may be awarded pursuant to

[§ 2412(a)], to the prevailing party in any civil action

brought by or against the United States or any agency

and any official of the United States acting in his or her

official capacity in any court having jurisdiction of such

action. The United States shall be liable for such fees and

expenses to the same extent that any other party would

be liable under the common law or under the terms of

any statute which specifically provides for such an award.

28 U.S.C. § 2412(b) (Supp. V 1981).

12c

important effect of this provision is to codify and make

applicable to the government the “bad faith” and “com-

mon benefit” exceptions to the American Rule.”

Section 2412(d)(1)(A) is more sweeping. It provides

that a court “shall” award an eligible *' private prevail-

ing party attorneys’ fees and other litigation expenses

unless some other statute specifically provides otherwise

or “the court finds that the position of the United States

was substantially justified or that special circumstances

make an award unjust.” ** Ordinary tort suits are ex-

cluded from the coverage of the provision, but the legis-

lative history makes clear that constitutional tort actions

come within its purview.” Section 2412(d) is avowedly

2» See H.R. REP. No. 1418, 96th Cong., 2d Sess. 9 (1980) ;

S. Rep. No. 253, 96th Cong., Ist Sess. 1, 4 (1979); H.R. Rep.

No. 1434, 96th Cong., 2d Sess. 25 (1980) (conference report).

The two exceptions to the American Rule are discussed in the

text at note 13 supra.

2% To be able to invoke the provision, parties must meet

certain financial requirements, set forth in § 2412(d) (2) (B).

As critics of the Act were wont to observe, the eligibility

ceilings are sufficiently high as to exclude relatively few per-

sons from the benefits of the statute.

*2 The full text of the provision reads:

Except as otherwise specifically provided by statute, a

court shall award to a prevailing party other than the

United States fees and other expenses, in addition to any

costs awarded pursuant to [§ 2412(a)], incurred by that

party in any civil action (other than cases sounding in

tort) brought by or against the United States in any court

having jurisdiction of that action, unless the court finds

that the position of the United States was substantially

justified or that special circumstances make an award

unjust.

28 U.S.C. § 2412(d) (1) (A) (Supp. V 1981). The kinds of

“fees and other expenses” (among which is “reasonable at-

torney fees”) that can be recovered under this provision are

described in 28 U.S.C. § 2412(d) (2) (A) (Supp. V 1981).

23 See H.R. REP. No. 1418, supra note 20, at 18; Note,

Attorney's Fees Under the EAJA, supra note 13, at 313.

13¢

experimental. Unlike section 2412(b), it contains a

“sunset” provision; unless reenacted before October 1,

1984, it will be automatically repealed.”

Because of the large bodies of case law defining the

contours of the two traditional exceptions to the Ameri-

can Rule, interpretation and application of section 2412

(b) usually is relatively straightforward.” Section 2412

(d)(1)(A), unfortunately, is much more difficult to

apply. It is not grounded in any body of common law

doctrine. Because of its recent vintage, it has not yet

acquired a discernible gloss of judicial interpretation.

And, most importantly, several of its crucial terms are

distressingly ambiguous. For reasons that will become

apparent, two of those terms—“the position of the United

States” and “substantially justified”—loom large in the

case before us. Before proceeding, therefore, we must

bring those phrases into sharper focus. And, of course,

we must strive to lend them shapes that will make them

meaningful vehicles, not only for disposing of the case

at hand, but for resolving other controversies that come

within the broad coverage of the provision.

B. “The Position of the United States”

The statute permits the government, when it loses a

case, to avoid liability for attorneys’ fees if it can show

that its “position” was substantially justified. The gov-

ernment’s “position,” for these purposes, might mean

one of two things. First, the term could refer to the gov-

ernmental action that precipitated the lawsuit. Second,

it could refer to the posture assumed by the government

* Pub. L. No. 96-481, § 204(c), 94 Stat. 2321, 2829 (1980)

(codified at 28 U.S.C. § 2412 note (Supp. V 1981) ).

% See, e.g., Fitzgerald v. Hampton, 545 F. Supp. 58, 56-60

(D.D.C. 1982).

2* See note 22 supra.

14c

in litigation. These two interpretations have come to be

known, respectively, as the “underlying action” and the

“litigation position” theories.

The judiciary has yet to settle on one or another con-

struction. As of the end of March of 1983, the issue had

been addressed (explicitly or implicitly) in twenty-two

decisions. In twelve of those cases, the court opted for

the “underlying action” theory.*’ In the other ten, the

court opted for the “litigation position” theory.* This

27 See Natural Resources Defense Council v. U.S. Environ-

mental Protection Agency, 703 F.2d 700, 707 (8d Cir. 1983);

Boudin v. Thomas, 554 F. Supp. 708, 705-06 & n.7 (S.D.N.Y.

1982); Environmental Defense Fund v. Watt, 554 F. Supp. 36,

40-41 (E.D.N.Y. 1982) ; MacDonald v. Schweiker, 553 F. Supp.

586, 540-41 (E.D.N.Y. 1982); Cornella v. Schweiker, 553

F. Supp. 240, 242 n.8 (D.S.D. 1982) (dicta) ; Globe, Inc. v.

United States, 553 F. Supp. 7, 9 (D.D.C. 1982) (semble);

Moholland v. Schweiker, 546 F. Supp. 383, 386 (D.N.H. 1982);

Nunes-Correia v. Haig, 548 F. Supp. 812, 816 (D.D.C. 1982);

Citizens Coalition for Block Grant Compliance v. City of

Euclid, 587 F. Supp. 422, 426 (N.D. Ohio 1982) (semble:

litigation position should be examined only when the court

“has insufficient information to determine the reasonableness

of the government’s underlying action”) ; Costantino v. United

States, 586 F. Supp. 60, 61 (E.D. Pa. 1981) (semble) ; Wolver-

ton v. Schweiker, 583 F. Supp. 420, 425 (D. Idaho 1982);

Photo Data, Inc. v. Sawyer, 583 F. Supp. 348, 352 (D.D.C.

1982).

28 See Kay Mfg. Co. v. United States, 699 F.2d 1376, 1379

(Fed. Cir. 1983) ; Gava v. United States, 699 F.2d 1367, 1370

(Fed. Cir. 1983); Tyler Business Servs. v. NLRB, 695 F.2d

73, 75 (4th Cir. 1982); Broad Ave. Laundry & Tailoring v.

United States, 693 F.2d 1887, 1890 (Fed. Cir. 1982); S & H

Riggers & Erectors, Inc. v. OSHRC, 672 F.2d 426, 430-31

(5th Cir. Unit B 1982) (semble); Grand Boulevard Improve-

ment Asa’n v. City of Chicago, 553 F. Supp. 1154, 1162-63

(N.D. Ill. 1982); Lauritzen v. Secretary of the Navy, 546

F. Supp. 1221, 1226 & n.6 (C.D. Cal. 1982); Operating Eng’rs

Local Union No. 3 v. Bohn, 541 F. Supp. 486, 495-96 (D.

Utah 1982); Berman v. Schweiker, 581 F. Supp. 1149, 1154

15c

circuit has not yet been confronted with the issue. The

case law, in sum, affords us little aid in attempting to

construe “the position of the United States.” We are

obliged, therefore, to conduct our own inquiry.”

(N.D. Ill. 1982) (semble); Alspach v. District Director of

Internal Revenue, 527 F. Supp. 225, 228 (D. Md. 1981).

The “underlying action” theory is commonly regarded as

the more expansive of the two options. Accordingly, several

of the courts that have adopted it have indicated their willing-

ness to hold the government liable for attorneys’ fees if either

its underlying action or its subsequent litigation position

lacked substantial justification. See, e.g., NRDC v. EPA, 708

F.2d at 711-12; Boudin v. Thomas, 554 F. Supp. at 705-06

& n.7; Environmental Defense Fund v. Watt, 554 F. Supp.

at 40-41; MacDonald v. Schweiker, 553 F. Supp. at 540-41;

Nunes-Correia v. Haig, 548 F. Supp. at 816. In the course

of our analysis, we will consider the desirability and prac-

ticability of such a composite approach. See text at note 61

infra. For now, however, we will discuss the two theories

as if they were mutually exclusive alternatives.

*° The reason such an inquiry is necessary and appropriate,

despite the fact that the District Court did not reach this

issue, see note 11 supra, will become apparent in Part III.

infra. To anticipate somewhat, the Board, in litigation be-

fore the District Court, took the position, not that its actions

were legally correct, but that they were not so flagrantly vio-

lative of an express statutory prohibition as to warrant exer-

cise of jurisdiction by the District Court. See text at note 93

infra. That argument might have been “substantially justi-

fied” even if the Board’s interpretation of its enabling act

were clearly incorrect. The meaning of “the position of the

United States” thus becomes crucial. If the phrase is defined

as the government’s underlying action, we must pass upon

the District Court’s holding that the Board’s denial of the

appellants’ two petitions was “substantially justified.” If, by

contrast, the phrase is defined as the government’s litigation

position, we need not consider that aspect of the court’s ruling

and can confine our attention to the court’s assessment of

the strength of the Board’s argument that it had not stepped

so plainly beyond the boundaries defined by the National Labor

Relations Act as to justify judicial intervention.

16c

1. Legislative Intent

The statute itself contains no clear indication of which

of the readings is correct. Section 2412(d)(1)(A) does

not explicate the term. And section 2412(d) (2), the

definitional provision, makes no reference to “the posi-

tion of the United States.”

Only two provisions of the Act offer any guidance, and

they point in inconsistent directions. First, section 2412

(d)(2)(C) indicates that the term “ ‘United States’

includes any agency and any official of the United States

acting in his or her official capacity.”® As the Third

Circuit observed in a recent case, this encompassing defi-

nition provides some support for the “underlying action”

theory, both because of its use of the word “acting” and

because of the fact that most of the “officials” referred

to by the provision would be incapable of taking a posi-

tion in litigation. Natural Resources Defense Council v.

U.S. Environmental Protection Agency, 703 F.2d 700,

707 (8d Cir. 1983). However, the support that this

definitional provision lends to the “underlying action”

theory is at best modest. As Judge Hunter pointed out

in his dissent in NRDC, the definitional section might

plausibly be read as nothing more than an acknowledg-

ment of the fact “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.” Jd. at 718 n.2. Second, section 2412(d) (3)

directs a court, when reviewing adversary adjudications

before administrative agencies, to award to a private

party who prevails on appeal the attorneys’ fees he in-

curred in the course of his litigation before the agency,”

* 28 U.S.C. § 2412(d) (2)(C) (Supp. V 1981).

*! More specifically, the provision instructs the court, when

awarding attorneys’ fees (under § 2412(d)(1)(A)) to a

private party who prevails on appeal, to include in its award

17c

unless the court finds “that during such adversary ad-

judication the position of the United States was substan-

tially justified, or that special circumstances make an

award unjust.” ** As the highlighted language indicates,

the provision presumes that the government’s “position,”

for the purpose of assessing its liability for attorneys’

fees resulting from administrative adjudication, is the

stance it adopted in litigation before the agency. It re-

mains possible, of course, that the phrase “position of

the United States” was intended to have a different

meaning when used in the context of litigation before the

courts, but if Congress contemplated such a difference, it

failed to indicate as much in the statute. In short, the

unequivocal adoption of the “litigation position” theory

in section 2412(d) (3) suggests that the identical phrase,

when used without qualification in section 2412(d) (1)

(A), should be interpreted as the posture adopted by

the government before the court.™

“fees and other expenses to the same extent authorized in” 5

U.S.C, § 504(a) (Supp. V 1981), which provides:

(1) An agency that conducts an adversary adjudication

shall award, to a prevailing party other than the United

States, fees and other expenses incurred by that party in

connection with that proceeding, unless the adjudicative

officer of the agency finds that the position of the agency

as a party to the proceeding was substantially justified or

that special circumstances make an award unjust.

(emphasis added). Note that this provision, like § 2412(d) (3)

itself, takes for ted that “the position of the United

States,” in the admi ve context, is its litigation position.

See text at note 33 infra.

28 U.S.C. §2412(d)(3) (Supp. V 1981) (emphasis

added) .

** The foregoing inference is reinforced somewhat by the

pee 3 Se be That provision authorizes a

court, “in its discretion,” to “reduce the amount to ———_

pursuant to this subsection, or deny an award, to the extent

that the prevailing party during the course of the proceed-

ings engaged in conduct which unduly and unreasonably

18c

On balance, we think that the support lent the “litiga-

tion position” theory by section 2412(d) (8) is somewhat

stronger than that lent the “underlying action” theory

by the definitional provision in section 2412(d) (2) (C).

We concede, however, that the scales do not tip decisively

one way or the other. One would hope that the legisla-

tive history would make possible a clean resolution of this

issue. Unfortunately, study of relevant statements made

by proponents and opponents of the bill proves even more

inconclusive.

Neither the committee reports nor the debates contain

an explicit statement purporting to construe “the posi-

tion of the United States.” The legislative history is,

however, rife with arguments that take for granted one

or the other option. Unfortunately, the number that seem

founded on the “underlying action” theory is roughly

the same as the number that seem founded on the “iti-

gation position” theory. Those various references have

been canvassed elsewhere; ™* for present purposes, it will

suffce to note the most important.

Strong support for the “litigation position” theory is

provided by the language used in both committee reports

to describe the standard of liability under section 2412

(d) (1) (A): “Where the Government can show that its

case had a reasonable basis both in law and fact, no

award [of attorneys’ fees] will be made.” H.R. REp.

No. 1418, supra note 20, at 10; S. Rep. No. 258, supra

protracted the final resolution of the matter in controversy.”

28 U.S.C. § 2412(d) (1) (C) (Supp. V 1981). The linkage thus

established between the size of the award and the private

party's behavior in litigation is at least consistent with an

assumption that the predicate for an award is the govern-

ment’s unreasonable behavior in litigation.

™ See NRDC v. EPA, 708 F.2d at 707-11; id. at 714-15

(Thompson, J., concurring) ; id. at 718-20 (Hunter, J., dis-

senting); Alepach v. District Director of Internal Revenue,

527 F. Supp. at 228-29.

19c

note 20, at 6 (emphasis added). Other statements, also

appearing in both reports, suggest (at least when read

in isolation) that Congress was exclusively concerned

with irresponsible governmental decisions to initiate or

continue litigation:

A court should look closely at cases .. . 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 un-

reasonable 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.

H.R. Rep. No. 1418, supra note 20, at 11; S. Rep. No.

2538, supra note 20, at 6-7 (emphasis added) .™

One can find equally evocative statements, however,

supportive of the “underlying action” theory. For ex-

ample, in defending the decision to place on the govern-

ment the burden of demonstrating that its position was

“For discussion of the light these passages cast on the

meaning of the requirement that the government’s position

be “substantially justified,” see text at note 66 infra. For

other statements in the legislative history supportive of the

“litigation position” theory, see, e.g., H.R. Rep. No. 1418,

supra note 20, at 20; 126 Cona. Rec. H10,230 (daily ed. Oct.

1, 1980) (statement of Rep. Broomfield) ; id. at H10,222 (state-

ment of Rep. Danielson) ; id. at H10,221 (statement of Rep.

Bereuter); 125 Conc. Rec. 21,444-45 (1979) (statement of

Sen. Kennedy); id. at 21,489 (statement of Sen. Ford) (“If

the agencies choose their cases carefully they will be completely

unaffected by this legislation. The only time that this legis-

lation would be applicable is if the Government is unable

to show that a case that it brought is ‘substantially jus-

tified.’ ’’).

20c

substantially justified,“ both committee reports argue

that “it is far easier for the Government, which has con-

trol of the evidence, to prove the reasonableness of ite ac-

tion than it is for a private party to marshal the facts to

prove that the Government was unreasonable.” H.R.

Rep. No. 1418, supra note 20, at 11; S. Rep. No. 253,

supra note 20, at 6 (emphasis added). The conclusions

to both reports declare: “Thus, by allowing an award of

reasonable fees and expenses against the Government

when its action is not substantially justified, S. 265 pro-

vides individuals an effective legal or administrative rem-

edy where none now exists.” H.R. REP. No. 1418, supra

note 20, at 12; S. Rep. No. 253, supra note 20, at 7 (em-

phasis added). And, in the floor debates, both supporters

and critics of the bill frequently manifested their assump-

tion that liability for fees would turn upon the strength

of the government’s justification for its regulatory be-

havior, rather than the colorability of the legal arguments

subsequently advanced in support of that conduct.”

We have thus arrived at an impasse; we must acknowl-

edge that Congress failed clearly to resolve the question

before us. To answer it, consequently, we must enlarge

our field of vision; we must try to discern the underly-

ing purposes of the Act as a whole, and then determine

which of the two possible definitions of “the position of

the United States” would best serve those enis.

* See text at notes 63-64 infra.

* See, e.g., 126 ConG. Rec. H10,219 (daily ed. Oct. 1, 1980)

(statement of Rep. McDade) (“All we are saying is that this

Government must regulate in a reasonable way, and if it does

not, then it must be held liable for that small businessman’s

costs and attorney’s fees.”) ; 125 Conc. Rec. 21,442 (1979)

(statement of Sen. Helms); id. at 21,488 (statement of Sen.

Domenici); id. at 1441 (statement of Sen. Domenici) (ac-

knowledging that the bill would award attorneys’ fees to a

private prevailing party “[i]f the Government could not sub-

stantiate the position that it has taken, that the citizen seeks

to have overturned”).

2lc

2. A Practicable Definition

The central objective of the EAJA, and of section

2412(d)(1)(A) in particular, was to encourage rela-

tively impecunious private parties to challenge unreason-

able or oppressive governmental behavior by relieving

such parties of the fear of incurring large litigation ex-

penses."* Achievement of that end, it was believed, would

** The preamble to the Act states this goal succinctly:

(a) The Congress finds that certain individuals, part-

nerships, corporations, and labor and other organizations

may be deterred from seeking review of, or defending

against, unreasonable governmental action because of the

expense involved in securing the vindication of their

rights in civil actions and in administrative proceedings.

(b) The Congress further finds that because of the

greater resources and expertise of the United States the

standard for an award of fees against the United States

should be different from the standard governing an award

against a private litigant, in certain situations.

(1) to diminish the deterrent effect of seeking re-

view of, or defending against, governmental action by

providing in specified situations an award of attorney

fees, expert witness fees, and other costs against the

United States ....

Pub. L. No, 96-481, § 202, 94 Stat. 2321, 2325 (1980). See

also H.R. REP. No, 1418, supra note 20, at 5-6, 9-10, 12; S.

Rep. No. 258, supra note 20, at 1, 5, 7; H.R. REP. No. 1434,

supra note 20, at 21. Virtually every congressman who spoke

in support of the bill argued that its principal goal was to

reduce deterrents to litigation—to give citizens the ability

and incentive to challenge, instead of submit to, unreasonable

regulation or other governmental action. For especially pun-

gent statements of this sort, see, e.g., 125 ConG. Rec, 21,444

(1979) (statement of Sen. Kennedy); id. at 21,442 (state-

ment of Sen. McClure) (“In far too many cases, a party will

knuckle under to a Federal order he knows to be wrong because

he cannot afford the cost of taking the matter to court.”); id.

at 21,441 (statement of Sen. Thurmond) ; id. at 1489 (state-

ment of Sen. DeConcini).

22c

promote three more general goals. First, Congress hoped

to provide relief to the victims of abusive governmental

conduct, to enable them to vindicate their rights without

assuming enormous financial burdens.” Second, it sought

to reduce the incidence of such abuse; it anticipated that

the prospect of paying sizable awards of attorneys’ fees

when they overstepped their authority and were chal-

lenged in court would induce administrators to behave

more responsibly in the future. Third, by exposing a

greater number of governmental actions to adversarial

testing, Congress hoped to refine the administration of

federal law—to foster greater precision, efficiency and

fairness in the interpretation of statutes and in the for-

mulation and enforcement of governmental regulations.”

* See, e.g., 126 ConG. REc. H10,280 (daily ed. Oct. 1, 1980)

(statement of Rep. Baldus); 125 Conc. Rec. 21,444 (1979)

(statement of Sen. Kennedy); id. at 21,448 (statement of Sen.

Nelson); id. at 21,435-36 (statement of Sen. Culver) ; id. at

21,485 (statement of Sen. DeConcini).

# See H.R. REP. No. 1418, supra note 20, at 12; S. Rep. No.

258, supra note 20, at 18; 126 Conc. Rec. H10,229 (daily ed.

Oct. 1, 1980) (statement of Rep. Symms); id. at H10,229

(statement of Rep. Heckler); id. at H10,226 (statement of

Rep. Smith); 125 Conc. Rec, 21,444 (1979) (statement of

Sen, Bayh) ; id. at 21,448 (statement of Sen. Nelson); id. at

21,441 (statement of Sen. Thurmond); id. at 21,486 (state-

ment of Sen. Dole). Significantly, a frequently cited example

of such reformed behavior was an increased willingness on

the part of government lawyers to consider which cases truly

merited pursuit. See, e.g., H.R. Rep. No. 1418, supra note 20,

at 20; 126 Conca. Rec. H10,226 (daily ed. Oct. 1, 1980) (state-

ment of Rep. Smith) ; 125 Conc. Rec. 21,448 (1979) (state-

ment of Sen. Nelson).

*1 An apt explanation of this objective can be found in H.R.

REP. No. 1418, supra note 20, at 10 and S. REP. No. 253, supra

note 20, at 5-6:

The bill rests on the premise that a party who chooses to

litigate an issue against the Government is not only repre-

senting his or her own vested interest but is also refining

and formulating public policy. An adjudication or civil

23¢

gle-minded pursuit of the foregoing goals would have

in@ficed Congress to enact a law providing for the auto-

matic award of attorneys’ fees to private parties who

prevailed in suits against the government. Congress did

not go that far, however, because of its sensitivity to two

other considerations. First, it did not wish to inhibit

legitimate efforts by the executive to enforce the law.”

Second, it feared the potentially huge cost to the govern-

action provides a concrete, adversarial test of Government

regulation and thereby insures the legitimacy and fairness

of the law. An adjudication, for example, may show that

the policy or factual foundation underlying an agency

rule is erroneous or inaccurate, or it may provide a

vehicle for developing or announcing more precise rules.

The bill thus recognizes that the expense of correcting

error on the part of the Government should not rest wholly

on the party whose willingness to litigate or adjudicate

has helped to define the limits of Federal authority. Where

parties are serving a public purpose, it is unfair to ask

them to finance t’ rough their tax dollars unreasonable

Government actio., and also bear the costs of vindicating

their rights.

See also H.R. REP. No. 1418, supra note 20, at 18; S. Rep. No.

258, supra note 20, at 21; 126 Cona. Rec. H10,226 (daily ed.

Oct. 1, 1980) (statement of Rep. Smith); 125 Conc. Rec.

21,442 (1979) (statement of Sen. McClure); id, at 21,485

(statement of Sen. DeConcini); id. at 1489 (statement of

Sen, DeConcini).

“2 See S. REP. No, 258, supra note 20, at 6 (explaining that

the rule enunciated in Newman v, Piggie Park Enters., 390

U.S. 400, 402 (1968) (per curiam) (prevailing plaintiffs in

suits brought under Title II of the Civil Rights Act of 1964,

42 U.S.C. § 2000a (1976), should ordinarily recover their

attorneys’ fees unless special circumstances would render an

award unjust) “is inappropriate in this context because it

might have a chilling effect on reasonable Government enforce-

ment efforts”); 126 Conc. Rec. H10,281 (daily ed. Oct. 1,

1980) (statement of Rep. Railsback) ; 125 Cona. Rec. 21,444-

45 (1979) (statement of Sen. Kennedy); id. at 21,448 (state-

ment of Sen. Nelson); id. at 21,485 (statement of Sen.

DeConcini).

24c

ment of an automatic fee-shifting provision.** Accord-

ingly, it selected an intermediate rule. In the words of

the committee reports:

Under S. 265, fees will be awarded unless the

Government can show that its action was substan-

tially justified or that special circumstances make

an award unjust. This standard balances the con-

stitutional obligation of the executive branch to see

that the laws are faithfully executed against the

public interest in encouraging parties to vindicate

their rights.

H.R. Rep. No. 1418, supra note 20, at 10; S. Rep. No.

253, swpra note 20, at 6.“

“In the late 1970s, several legislative initiatives seeking to

make the United States liable (on some basis) for attorneys’

fees when it lost civil cases foundered, substantially because

of the legislators’ uneasiness at “the high projected cost to

the United States” of such a statute, See H.R. Rep. No. 1418,

supra note 20, at 6. Concern over the potentially large financial

burden generated by a fee-shifting statute was frequently ex-

pressed during the hearings and debates on the bill that ulti-

mately became the EAJA. See, e.g., Award of Attorneys’ Fees

Against the Federal Government: Hearings on S. 265 Before

the Subcomm. on Courts, Civil Liberties, and the Administra-

tion of Justice of the House Comm. on the Judiciary, 96th

Cong., 2d Sess. 75, 77, 81-82 (1980) (statement of Mary

Derfner, on behalf of the Lawyers’ Committee for Civil Rights

Under Law and the ACLU) ; Equal Access to Justice Act of

1979: Hearings on S. 265 Before the Subcomm. on Improve-

ments in Judicial Machinery of the Senate Comm. on the

Judiciary, 96th Cong., 1st Sess. 11-12 (1979) (statement of

Michael Hawkins, U.S. Attorney, Dept. of Justice); id. at 45,

50-52 (statement of Raymond S. Calamaro, Deputy Asst. Atty.

General, Office of Legislative Affairs, Dept. of Justice); id.

at 166-68 (letter from NLRB, Office of the Genera] Counsel,

to Chrmn. DeConcini) ; 126 Conc. Rec, H10,228 (daily ed.

Oct. 1, 1980) (statement of Rep. Rostenkowski) ; id. at 1110,222

(statement of Rep. Danielson); id. at H10,221 (statement of

Rep. Drinan); 125 Conc. REC. 1439 (1979) (statement of /

Sen. DeConcini).

4 A concise description of the deliberations that resulted

in adoption of this intermediate standard is contained in 8.

Rep. No. 258, supra note 20, at 2-8. The version of the Act

25c

Which of the two possible interpretations of “the posi-

tion of the United States” would comport better with the

foregoing complex of concerns? To answer that question,

we first need to determine when and how it will matter

which theory we adopt. Examination of the variety of

kinds of controversies covered by the Act reveals that, in

the large majority of contexts, it makes no functional dif-

ference how one conceives of the government’s “posi-

tion.” *" In. actions brought by the United States, the

governmental action that precipitates the controversy al-

most invariably is its litigation position. Most suits

brought against the United States entail a similar cor-

initially considered in the 95th Congress by the Subcommittee

on Improvements in Judicial Machinery of the Senate Judici-

ary Committee provided for a mandatory award of fees when-

ever the government lost a civil action (unless it sounded in

tort). The Justice Department criticized the proposal, on the

grounds that “the cost could run as high as $500 million per

year,” and “a mandatory award would have a ‘chilling effect’

on proper Government enforcement efforts.” Jd. at 2. The

Department proposed instead that fees be awarded if and only

if “the governmental action was ‘arbitrary, frivolous, unrea-

sonable, or groundless, or .. . the United States continued to

litigate after it clearly became so.’” Id, The subcommittee

rejected the foregoing proposal but, in response to the concerns

expressed by the Department, approved an amendment to the

bill that eliminated the provision for mandatory awards and

“substituted a standard which would allow prevailing parties

to recover fees ‘unless * * * the position of the United States

was substantially justified or * * * special circumstances make

an award unjust.’” Jd. at 3. As explained in the final com-

mittee report, “[t]his standard represented an acceptable

middle ground between the mandatory award required by

S. 2354 as originally drafted and the restrictive standard

adopted in the Department of Justice draft proposal.” /d.

See also H.R. Rep. No. 1418, supra note 20, at 13-14.

“For recognition that the distinction between the theories

in most cases is academic, see Environmental Defense Fund v.

Watt, 554 F. Supp. at 40; Operating Eng’re Local Union No.

8 v. Bohn, 641 F. Supp. at 495; Citizens Coalition for Block .

Grant Compliance v. City of Euclid, 587 F. Supp. at 426.

26c

respondence. In the usual case, the government acts in a

particular fashion and then defends its conduct before an

administrative agency and/or a court. Under such cir-

cumstances, the litigation position of the United States

will almost always be that its underlying action was

legally justifiable.* Only in a minority of cases does it

matter whether a court, reviewing a petition for fees

brought under the EAJA, looks to the government’s orig-

inal behavior or to its subsequent legal arguments. As-

sessment of the competing theories, therefore, must be

made with reference to those unusual contexts. Relying

on our experience, we believe it not unreasonable to as-

sume that most such. cases will take one of five forms:

Example One: Appeals from Agency Actions Under

Deferential Standards of Review

The standards by which courts review most kinds of

administrative action embody some principle of defer-

ence. An agency rulemaking decision, for instance, must

be upheld if it contravenes no statutory or constitutional

provision, was reached in compliance with pertinent pro-

cedural requirements, is supported by substantial evi-

dence, and is not arbitrary, capricious, or an abuse of

discretion. 5 U.S.C. § 706(2) (1976). A decision by an

agency not to institute a rulemaking proceeding is ac-

corded even more deference: if the agency adequately

explains the facts and policy concerns it relied upon, and

“ Thus, for example, the Secretary of Health and Human

Services frequently denies disability benefits; when such a

denial is challenged before a district court, the Secretary

argues that his ruling was consistent with the law. Similarly,

the Internal Revenue Service often denies applications for

refunds; when challenged in court, the agency asserts the

legal basis for its decisions. The Federal Energy Regulatory

Commission is frequently called upon to interpret contracts

pertaining to the wholesale purchase of electrical power; in

litigation brought by adversely affected parties, the Commis-

sion usually argues that its decisions complied with its en-

abling act and its own regulations.

27c

if those facts and concerns have some basis in the record,

a court will not overturn its judgment. WWHT7, Inc. v.

FCC, 656 F.2d 807, 817 (D.C. Cir. 1981). To take a

more specific example especially germane to the instant

case, a decision by the NLRB regarding the appropriate

scope of a bargaining unit will not be reversed by a court

unless it was “made in excess of [the Board’s] delegated

powers and contrary to a specific prohibition in the [Na-

tional Labor Relations] Act.” See Leedom v. Kyne, 358

U.S. 184, 188 (1958); Boire v. Greyhound Corp., 876

U.S. 4738, 480-82 (1964).

When an appellate court, applying one of these defer-

ential standards of review, overturns an agency’s deci-

sion, how should the agency’s liability for attorneys’

fees under the EAJA be assessed? Assume, for example,

that the promulgation of a novel regulation is held to

have been “arbitrary and capricious.” If the ensuing

EAJA petition submitted by the prevailing private party

were evaluated under the “underlying action” theory, the

agency’s liability for fees would turn upon whether its

adoption of the rule was “substantially justified.” It

is very unlikely that the agency would prevail under such

a test; a court that has just concluded that the agency’s

action was “arbitrary and capricious” would be hard

pressed to rule that its action was nevertheless “substan-

tially justified.” The net effect would be that the EAJA

would become, for all practical purposes, an automatic

fee-shifting provision in these circumstances.” That re-

sult seems plainly inconsistent with Congress’ general ob-

jective in enacting section 2412(d)(1)(A): to establish

*7 It is perhaps conceivable that courts could develop a defi-

nition of “substantially justified” that would make it possible

for them coherently to conclude, in some cases, that “arbitrary

and capricious” conduct was nevertheless “substantially justi-

fied.” However, the net result of such a doctrinal development

would almost certainly be trivialization of the adjective “sub-

stantial,” which would clearly be inconsistent with Congress’

intent in enacting the EAJA. Sve text at notes 66-67 infra.

28c

an “intermediate” standard for the allocation of attor-

neys’ fees, one falling somewhere between the English

Rule and the current American Rule.** More consistent

with the purposes of the Act would be a rule whereby a

court, when reviewing an EAJA petition arising out of

a case of the sort described above, would ask: Was the

agency’s litigation position (i.e., its argument on appeal

that its promulgation of the regulation was not arbitrary

and capricious) substantially justified? *

Example Two: Standards of Liability Linked to the

Justification for Conduct

The government’s liability, in several kinds of suits,

turns upon its ability to offer a reasonable justification

for its own or its officials’ behavior. The category that

springs most readily to mind are suits brought against

the United States under the Eighth Amendment ™ alleg-

ing that conditions in federal prisons constitute “cruel

and unusual punishment.” Though the standard of li-

ability governing such actions remains somewhat in flux,

a crucial element in almost all modern formulations of

the test is the absence of a defensible rationale for the

conditions at issue. Thus, the Supreme Court recently

summarized the governing law as follows:

Today the Eighth Amendment prohibits punishments

which, although not physically barbarous, “involve

+8 See note 44 supra and accompanying text.

4° See Grand Boulevard Improvement Ass’n v. City of Chi-

cago, 553 F. Supp. at 1162; Operating Eng’rs Local Union No.

3 v. Bohn, 541 F. Supp. at 495 (both opinions adopting the

“litigation position” theory for substantially the reasons stated

in this section of the text).

only declaratory and injunctive relief and are brought only

against officials of the United States acting in their official

capacity. It is clear that the EAJA applies to such actions.

See 28 U.S.C. § 2412(d) (2)(C) (Supp. V 1981).

29c¢

the unnecessary and wanton infliction of pain,” or

are grossly disproportionate to the severity of the

crime. Among “unnecessary and wanton” inflictions

of pain are those that are “totally without penologi-

cal justification.”

Rhodes v. Chapman, 452 U.S. 337, 346 (1981) (citations

and footnote omitted). Clearly, a prerequisite to a find-

ing of a constitutional violation, under the foregoing

standard, is a determination that the prison conditions

in question are not “substantially justified.” ™

The close parallel between the standard of liability,

in suits of this sort, and the criterion for the award of

attorneys’ fees under the EAJA gives rise to a set of

problems similar to those discussed in the preceding ex-

ample. If, when evaluating an EAJA petition brought

by a plaintiff (or class of plaintiffs) who prevailed in a

case of the kind just described, the judge focused on the

justification for the government’s “underlying action,” he

or she would find it virtually impossible to deny the

plaintiff(s) attorneys’ fees. The net result would be that

the EAJA would again become something approaching

an automatic fee-shifting provision for a significant cate-

gory of cases. As indicated above, this seems not to have

been contemplated by the congressmen who enacted the

statute.” Thus, in this context as well, it seems prefer-

51 Another example of a kind of suit in which the standard

of liability is linked to the justification for governmental con-

duct is an action alleging that federal law enforcement officers

conducted a warrantless search and seizure unjustified by

“exigent circumstances” in violation of the Fourth Amend-

ment. For discussions of the complex and as yet unresolved

question of the extent to which the United States may be

held liable in damages (under the Federal Tort Claims Act,

28 U.S.C. § 2680(h) (1976) ) in situations of this general sort,

see Carlson v. Green, 446 U.S. 14, 19-20, 28 (1980) (dicta);

Birnbaum v. United States, 588 F.2d 319, 327-28 (2d Cir.

1978).

52 We need not consider here the possibility that § 2412(b) of

the EAJA has the effect of making the United States auto-

able for the court to attend to the strength of the argu-

ments advanced by the government in support of its de-

nial of liability, rather than to the justification for the

behavior itself.”

matically liable for attorneys’ fees when it loses a suit seeking

to vindicate a constitutional right, on the ground that a state

or its official would ordinarily be so liable, under 42 U.S.C.

§ 1988 (Supp. V 1981), in an analogous suit brought under

42 U.S.C. § 1988 (Supp. V 1981). See Lauritzen v. Secretary

of the Navy, 646 F. Supp. at 1227-29 & n.10. Whatever Con-

gress may have achieved (intentionally or unintentionally) in

§ 2412(b) by making the United States liable for fees “to

the same extent that any other party would be liable...

under the terms of any statute which specifically provides for

such an award,” it seems clear that Congress did not intend,

when it adopted the “substantially justified” standard embod-

ied in § 2412(d) (1) (A), in effect to bring the United States

within the coverage of the Civil Rights Attorney’s Fees

Awards Act, see note 16 supra and accompanying text.

58 To illustrate the difference between the theories in prac-

tice, consider the following case: a prisoner challenges as vio-

lative of the Eighth Amendment a novel system adopted by a

federal penitentiary for classifying and segregating inmates,

whereby those convicted of specific crimes (all involving

unprovoked personal violence) are confined together in a sep-

arate, unusually uncomfortable facility. The prison officials

defend the system on the ground that it is necessary to pro-

tect weaker inmates from violence and sexual assault. The

court rejects the officials’ argument, rules that the system en-

tails “the unnecessary and wanton infliction of pain,” Rhodes

v. Chapman, 452 U.S. at 346, and orders that the classification

procedures be changed. The court’s ruling on the merits of the

case would seem to dictate a finding that the government’s

“underlying action” was not “substantially justified,” and a

consequent award of attorneys’ fees to the prevailing parties.

By contrast, were the court’s attention focused on the argu-

ment advanced in litigation by the prison officials, it might

3lc

Example Three: Defenses Unrelated to the

Merits of the Government’s Behavior

When civil actions are brought against the United

States, it is sometimes able to resist on the basis of de-

fenses unrelated to the merits of the underlying actions

of its officials. For example, if, as a result of a change

in the government’s own position or of unrelated events,

the potential for impairment of a plaintiff’s interests

has been reduced, the government may be able to argue

that the case is moot. Or, if the plaintiff deiayed bring-

ing suit, the government may be able to rely on a statute

of limitations or the doctrine of laches.“ Each of these

defenses is founded on important policy considerations.

For example, the mootness doctrine reduces the likeli-

hood that courts will decide cases unaided by the kind

of thorough adversarial scrutiny of the relevant issues

that only a genuine controversy between the parties can

create.” Statutes of limitation and the laches doctrine

promote repose and encourage aggrieved persons to bring

suits while evidence is still fresh and reliable.

The choice between the “underlying action” and “litiga-

tion position” theories will significantly affect the gov-

ernment’s willingness to assert viable defenses of this

sort. An example might be the situation of a government

of legitimate effort by the executive to comply with or en-

force the law that Congress wished not to chill. See text at

note 42 supra.

% Other examples: if the plaintiff has not explored alterna-

tive avenues of relief, the government may defend on the

ground that he has not exhausted his administrative remedies;

if the plaintiff lacks a significant stake in the outcome of the

dispute, the government may argue that he does not have

standing to bring the suit.

56 The mootness doctrine also, of course, has a constitutional

underpinning (which itself has been explained partly on the

basis of the policy consideration described in the text). See

Powell v. McCormack, 395 U.S. 486, 496 & n.7 (1969); Sibron

v. New York, 392 U.S. 40, 57 (1968).

32c

attorney who must decide whether to contest a moderately

stale suit against the United States. Because of the pas-

sage of time, he may be able to collect only scant evidence

to dispute the plaintiff’s allegations, but he may never-

theless have a colorable (but not “sure-fire”’) laches de-

fense. If the governing interpretation of “the position

of the United States,” within the meaning of the EAJA,

were the government’s “underlying action,” the attorney

might well decide not to contest the suit (i.e., not to

assert the laches argument). He would realize that, if

he did not prevail, the government would automatically

be liable, not only for the value of the claim, but also

for the plaintiff’s attorneys’ fees (because government

counsel would be unable, at this late date, to show that

the original behavior by the alleged perpetrators of the

plaintiff’s harm was substantially justified) .

In sum, tying EAJA awards to the strength of the

justification for the government’s original action would

discourage counsel for the government from asserting

defenses unrelated to its officials’ conduct that have a

significant chance of prevailing. Such an outcome seems

both unfortunate, from a policy standpoint, and incon-

sistent with Congress’ desire not to chill legitimate efforts

by the executive to enforce the law. Thus, here again, it

seems more sensible for courts, when reviewing EAJA

petitions, to attend to the strength of the legal arguments

advanced on behalf of the United States.

Example Four: Supervening Change in the Law

Frequently, during the time in which a suit brought

against (or by) the United States is pending, the perti-

nent legal rules are altered in a manner adverse to the

government.” The effect of such a change often is that,

* The most common change of this kind is a revision or clar-

ification of judicial interpretation of the constraints imposed

on an agency's discretionary authority by its enabling act.

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while the government’s action was “substantially justi-

fied” when originally undertaken, persistence in defend-

ing that action in court is unjustifiable. In such a situa-

tion, if counsel for the United States stubbornly continues

litigating the case, compelling the private party to incur

attorneys’ fees before eventually prevailing, it seems clear

that the objectives underlying the EAJA would be served

by shifting those costs to the government. Application

of the “underlying action” theory would not have that

effect; application of the “litigation position” theory

would.

Example Five: Surrender by the Government

Assume that a government contractor believes that

the United States has failed to abide by the terms of an

agreement (e.g., has misapplied a provision designed to

adjust contract prices to accord with inflation). The

contractor hires a lawyer who (without consulting the

government contracting officer) conducts an investigation

and then drafts and files a civil complaint. The govern-

ment’s attorney, upon receiving the complaint, conducts

. his own inquiry and concludes that the claim is meri-

torious. (E.g., he finds that, though the government’s

error was inadvertent, it nevertheless constituted a clear

violation of the terms of the contract.) The government

attorney informs the responsible official of his findings,

who pays the plaintiff the money to which he is legally

entitled. The plaintiff then brings a second action, under

the EAJA, to recover his attorneys’ fees. If the petition

is evaluated under the “underlying action” theory, the

contractor will prevail. (Even though the government

never took a litigation position hostile to the plaintiff,

the plaintiff will qualify as a “prevailing party,” and the

conduct that gave rise to the suit will fail the “sub-

stantial justification” test.) If it is assessed on the

* Cf. Environmental Defense Fund v. Watt, 554 F. Supp.

at 41 (Applying the “underlying action” theory to a case in

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basis of the “litigation position” theory, the contractor

will lose.®*

It is not immediately obvious which of the foregoing

results is preferable. In favor of the first option, it

could be argued that the prospect of being compelled

to pay attorneys’ fees in such situations would make

government administrators more careful and (perhaps

more importantly) would reduce the incidence of less

which the government abandoned the practice challenged by

the plaintiffs and entered into settlement negotiations very

soon after the filing of the complaint, the court concluded that

the government had failed to demonstrate that its original be-

havior was substantially justified and ordered it to pay attor-

neys’ fees.).

58 Cf. Operating Eng’rs Local Union No. 3 v. Bohn, 641 F.

Supp. at 495-96 (Applying the “litigation position” theory to

a case in which the government capitulated within nine days

of its receipt of the complaint, the court concluded that the

government’s position was “substantially justified” and ac-

cordingly denied attorneys’ fees under the EAJA.).

It seems clear that, if the government does not immediately

accede to the plaintiff’s demand, but instead initially opposes

his claims and then at some later stage (¢.g., in a pre-trial

settlement) surrenders, the United States will be liable for at-

torneys’ fees regardless of which theory is applied. Under

such circumstances, not only will government have acted un-

reasonably, but it will have adopted (at least briefly) a litiga-

tion position lacking substantial justification. For strong indi-

cations of Congress’ intent that fees be awarded under these

circumstances, see H.R. REP. No. 1418, supra note 20, at 11;

S. REP. No. 258, supra note 20, at 7. .But see Alspach v. Dis-

trict Director of Internal Revenue, 527 F. Supp. at 229 (find-

ing the litigation position of the IRS to have been “substan-

tially justified” when it initially resisted a clearly meritorious

suit to enjoin it from collecting a tax, but surrendered one

35c¢

innocent “mistakes.” In favor of the second option,

it could be argued that routine payment of attorneys’

fees under these circumstances would only foster col-

lusion between lawyers and putative victims of govern-

mental errors and would result in unnecessary expendi-

tures of public funds. Most such disputes can be re-

solved quickly and easily through informal discussion

between the aggrieved party and the responsible govern-

ment official. Awarding attorneys’ fees to private parties

who, instead of availing themselves of such avenues of

relief, file civil complaints would simply result in un-

necessary—and unnecessarily costly—formalization of the

processes whereby the competing interests of state and

citizen are clarified and accommodated. Though the issue

is not clear-cut, we think that, on balance, the latter

considerations are the more compelling, in view of the

purposes of the Act as a whole. Accordingly, the “litiga-

tion position” theory seems preferable in this context

as well.”

To summarize, in each of the five contexts we can

imagine in which the definition of “the position of the

*® The net effect would be promotion of one of the objectives

underlying the EAJA—reduction of the incidence of abusive

governmental action. See text at note 40 supra.

awards of fees in circumstances of this sort is that such a rule

would likely result in significant waste of judicial resources.

Whenever the government capitulated at the outset of litiga-

tion and the victorious private party submitted a request for

fees under the EAJA, the court that received the petition

would be obliged to conduct a full-scale hearing on the merits

in order to assess the strength of the justification for the gov-

ernment’s original action. (Indeed, if government counsel

were aware that such hearings would likely be necessary, they

would be significantly less inclined to capitulate in the first

place, figuring that they might as well contest the merits of

the claim if they were forced to contest the government's li-

ability for fees.) It seems unlikely that Congress intended (or

would have wanted) the Act to spawn otherwise unnecessary

proceedings of this kind.

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United States” would make a difference, it seems more

sensible and consistent with the purposes of the EAJA

to interpert the phrase as the stance taken by the United

States in litigation than to interpret it as the govern-

mental behavior that precipitated the suit.

- One potential objection remains to be considered: it

might be argued that our analysis has been flawed by

our reliance on a false dichotomy. Why not award fees

if either the government’s litigation position or its un-

derlying action was not substantially justified? Review

of the scenarios described above, however, reveals the

emptiness of

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