Equal Access to Justice Act: Implementation

SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its

regulations by adding new provisions designed to implement the Equal

Access to Justice Act (EAJA). The EAJA provides for the award of fees

and expenses to certain individuals and businesses that prevail in

agency formal adjudicatory proceedings in which the agency's position

is determined not to have been substantially justified.

EFFECTIVE DATE: June 6, 1994.

FOR FURTHER INFORMATION CONTACT: Susan Fonner, Office of the General

Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555,

telephone (301) 504-1634.

SUPPLEMENTARY INFORMATION:

I. Background.

II. Responses to Comments Received.

III. Administrative Statements.

I. Background

The Equal Access to Justice Act (EAJA) became law on October 21,

1981 (5 U.S.C. 504). The EAJA authorizes agencies to award attorney

fees and other expenses to parties that prevail over an agency in

certain agency proceedings under specified circumstances. Generally,

for an award to be made, the proceeding must be one that is ``required

by statute to be determined on the record.'' See, Ardestani v. U.S.

Department of Justice, -------- U.S. --------, 112 S.Ct. 515 (1991).

On October 28, 1981 (46 FR 53189), the NRC published a proposed

rule designed to implement the EAJA in the Federal Register. However,

serious doubt developed as to the need for the regulations. A

significant consideration in this regard was the impact of a statutory

bar against the use of funds appropriated to the NRC ``to pay the

expenses of, or otherwise compensate, parties intervening in regulatory

or adjudicatory proceedings.'' This provision first appeared in the

Energy and Water Development Appropriations Act of 1981 (Pub. L. No.

966-367, Sec. 502, 94 Stat. 1344, 1345 (1980)), and has continued to

appear each year in subsequent NRC appropriation acts. In addition,

case law developed in the 1980's indicating that the Commission would

receive judicial support if it determined that no NRC license

proceeding of any kind is covered by the EAJA.

With the enactment of the Inspector General Act Amendments of 1988

(Pub. L. 100-504, 1102 Stat. 2515), which established an Office of the

Inspector General in the NRC, the NRC became subject to the Program

Fraud Civil Remedies Act (PFCRA), 31 U.S.C. ch. 38. Hearings under the

Program Fraud Civil Remedies Act are expressly covered by the EAJA,

necessitating the issuance of EAJA regulations by the NRC. However,

because of the length of time that had gone by since the NRC issued the

1981 proposed EAJA rule, the Commission replaced it with a new proposed

rule, published on August 2, 1993 (58 FR 41061). The new proposed rule

was essentially similar to a model rule suggested by the Administrative

Conference of the United States (ACUS) for agency adoption. (May 6,

1988, 51 FR 16665.)

II. Responses to Comments Received

In response to the August 2, 1993 proposed rule, the NRC received

one set of comments from ACUS and one set from the Nuclear Management

and Resources Council (NUMARC). The NRC's consideration of the comments

follows.

A. Time Deadlines

1. Decision on the Petition for Increase of Maximum Rate for Attorney

Fees

Comment. ACUS recommended that the rule provide a specific time

frame for agency action on a petition for rulemaking to increase the

maximum rate for attorney fees.

Response. The EAJA provides a $75 hourly ceiling on attorney fees,

but allows agencies to raise the statutory ceiling by regulation. The

proposed rule provides that any person may file with the Commission a

petition for rulemaking to increase the $75 maximum hourly rate for

attorney fees, and refers to 10 CFR 2.802 and 2.803 for the procedures

to be followed with respect to such petitions. Neither the proposed

rule nor 10 CFR 2.802 nor 10 CFR 2.803 provides a specific time frame

for agency action on the petition for rulemaking. A sentence has been

added to 10 CFR 12.107 requiring the Commission to determine what

action it will take on the petition within 90 days after the petition

is filed.

2. Decision on the Application for Award of Attorney Fees

Comment. ACUS recommended that the rule provide a specific time

frame for the adjudicative officer to issue an initial decision on the

application for award of attorney fees.

Response. 10 CFR 12.307 of the proposed rule states requirements

for the adjudicative officer's initial decision on the application for

award of attorney fees, but does not prescribe a time limit for the

adjudicative officer to issue the decision. A sentence has been added

to 10 CFR 12.307 requiring the initial decision to be issued within 90

days after completion of proceedings on the application, but permitting

the adjudicative officer to extend the time limit after notice to the

parties of the reason for the delay. Authority is provided for the

adjudicative officer to extend the time period in order to prevent the

interruption of cases presenting pressing health and safety concerns.

The NRC expects that extensions will be issued sparingly.

B. Exhaustion of Administrative Remedies

Comment. ACUS stated that if the NRC believes that a request for

administrative review should be a prerequisite to judicial review, it

should recast 10 CFR 12.308 (Agency review) in light of the Supreme

Court's decision in Darby v. Cisneros, ______ U.S. ______, 113 S.Ct.

2539 (June 21, 1993).

Response. Within the last year, the Supreme Court cast new light on

the requirements for exhaustion of administrative remedies before

appealing an agency decision to the courts. In Darby v. Cisneros, the

Court held that an agency cannot insist on exhaustion of intra-agency

appeals prior to judicial review unless the agency promulgates rules

that require intra-agency appeals and stay the effect of agency

decisions during such appeals. The Commission believes that for

purposes of judicial and administrative economy a request for

administrative review should be a prerequisite to judicial review,

particularly because the NRC frequently entertains proceedings that

encompass highly technical matters.

The cross-reference in 10 CFR 12.308 to the review procedures set

out in 10 CFR 2.786 should be sufficient to satisfy the commenter that

the NRC has addressed the Darby case ruling in these regulations,

because 10 CFR 2.786(b)(1) expressly provides that the filing of a

petition for review is mandatory for a party to exhaust its

administrative remedies. Nevertheless, it may be considered fairer

notice to state the requirement in 10 CFR 12.308 itself. Therefore, the

NRC has amended 10 CFR 12.308 to state unambiguously that an aggrieved

party is required to seek Commission review of the adjudicative

officer's initial decision.

The application of the part of the Court's opinion on staying the

effect of the initial decision seems inapposite in the context of an

EAJA administrative proceeding, because it makes little sense to speak

of a stay of an initial decision denying the application for award of

attorney fees, which is the type of decision most likely to be

appealed. A successful applicant for an award is not likely to appeal

unless he or she is dissatisfied with the amount of the award. This

poses a very different type of situation from that in the Darby case,

where the Court had before it an agency decision debarring petitioners

from participating in Federal programs. Nevertheless, in what is

perhaps an excess of caution, we have included in NRC's EAJA rule a

statement on staying the effect of the initial decision during an

appeal to the Commission.

C. Proceedings Subject to the EAJA

Comment. NUMARC commented that the rule should be revised to make

clear that the only proceedings subject to NRC's EAJA rule are those

conducted pursuant to the Program Fraud Civil Remedies Act.

Response. The EAJA applies only to an agency adversary

adjudication. 50 U.S.C. 504(a). The term ``adversary adjudication'' is

defined by 5 U.S.C. 504(b)(1)(C) to mean an appeal of a decision made

pursuant to section 6 of the Contract Disputes Act of 1978 (41 U.S.C.

605) before an agency board of contract appeals, a hearing conducted

under 31 U.S.C. ch. 38 (PFCRA), and an adjudication under 5 U.S.C. 554

(the Administrative Procedure Act). Section 554 of the Administrative

Procedure Act expressly states that (with certain exceptions) it

applies ``in every case of adjudication required by statute to be

determined on the record after opportunity for an agency hearing.''

A proceeding for the purpose of granting or renewing a license is

expressly excluded from EAJA coverage by 5 U.S.C. 504(b)(1)(C).

However, there is no express exclusion of proceedings suspending,

revoking, or amending a license, including that for a nuclear reactor.

As indicated in the Supplementary Information for NRC's proposed EAJA

rule, the question of such proceedings was at least addressed partially

in 1983, when a materials license amendment proceeding was judicially

held as not being required by statute to be conducted ``on the

record.'' In that case, the court declined to read section 189(a) of

the Atomic Energy Act of 1954 (AEA) as requiring an on-the-record

hearing, in the absence of clear Congressional intent to trigger the

formal on-the-record hearing provisions of the Administrative Procedure

Act. West Chicago, Ill. v. U.S. Nuclear Regulatory Commission, 701 F.2d

632 (1983). Since that time, the Commission has gone on record that it

interprets section 189a of the AEA as not requiring formal hearings in

reactor licensing proceedings. En Banc Brief for Respondents dated

August 30, 1991 (filed in the U.S. Court of Appeals for the District of

Columbia Circuit, No. 89-1381, Nuclear Information and Resource Service

v. NRC, at pp 32-38).

In light of the above, it is not unreasonable to conclude that no

NRC proceeding other than an appeal to a board of contract appeals

under the Contract Disputes Act or a Program Fraud Civil Remedies Act

hearing is covered by the EAJA. Nevertheless, the Commission does not

wish to frame its EAJA regulations in such a way as to preclude

potential applicants for attorney fee awards from raising the issue of

EAJA coverage, if they can make a good faith argument that the

proceeding in which they have been involved falls under the EAJA. In

addition, there is always the possibility of new enactments that could

make the EAJA applicable to proceedings not previously entertained by

the agency. Therefore, the Commission has decided not to state that the

NRC's EAJA rule applies only to a proceeding under the Program Fraud

Civil Remedies Act.

Nevertheless, the Commission has decided to amend 10 CFR 12.101,

12.102, and 12.103 to clarify its intent regarding the scope of

coverage of the regulations. The amendment does not make express

reference to any type of proceedings other than appeals under the

Contract Disputes Act and adjudications conducted pursuant to the

Program Fraud Civil Remedies Act, but it contains a general provision

that will encompass other types of proceedings that may fall within the

parameters of the EAJA. This leaves room for case-by-case

determinations on applicants' claims of coverage in areas that have not

been addressed previously by statute, case law, or express Commission

interpretation.

III. Administrative Statements

Environmental Impact: Categorical Exclusion

The NRC has determined that this regulation is the type of action

described in categorical exclusion 10 CFR 51.22(c). Therefore, neither

an environmental impact statement nor an environmental assessment has

been prepared for this rule.

Paperwork Reduction Act Statement

The information collection requirements contained in this rule are

exempt from the Paperwork Reduction Act of 1980 (44 U.S.C. 3518(c)(1)).

Regulatory Analysis

The EAJA provides that individuals and businesses that meet certain

net worth and other requirements and prevail over the NRC in an

adversary adjudication in which the NRC's position is not substantially

justified may be awarded fees and expenses incurred in connection with

the proceeding. Recent events, most notably the NRC's publication of a

final rule implementing the Program Fraud Civil Remedies Act and

actions thereunder, suggest that it is necessary for the NRC to adopt

procedures to govern the receipt and determination of applications for

EAJA fees. The procedures adopted mirror in important respects the

model rule promulgated by the ACUS. The NRC has fulfilled the

statutorily mandated process of consultation between the Chairman of

the ACUS and the agency with respect to EAJA implementing procedures.

See 5 U.S.C. 504(c)(1). The Commission believes that the procedures

adopted are preferable to other procedural requirements that might be

imposed. The foregoing discussion constitutes the regulatory analysis

for this final rule.

Regulatory Flexibility Certification

In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C.

605(b), the Commission certifies that if promulgated, this rule will

not have a significant economic impact on a substantial number of small

entities. The rule merely will establish a procedural framework for the

submission and determination of applications for fees and expenses

incurred in participating in NRC adjudications and will not itself

impose significant economic benefits or burdens.

Backfit Analysis

The NRC has determined that the backfit rule, 10 CFR 50.109, does

not apply to this rule, because these amendments do not involve any

provisions which would impose backfits as defined in 10 CFR

50.109(a)(1).

List of Subjects in 10 CFR Part 12

Adversary adjudications, Award, Equal Access to Justice Act, Final

disposition, Net worth, Party.

For the reasons set out in the preamble and under the authority of

the Atomic Energy Act of 1954, as amended, the Energy Reorganization

Act of 1974, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting

a new 10 CFR part 12.

1. A new part 12 is added to 10 CFR chapter I to read as follows:

PART 12--IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN

AGENCY PROCEEDINGS

Subpart A--General Provisions

Sec.

12.101 Purpose.

12.102 When the EAJA applies.

12.103 Proceedings covered.

12.104 Eligibility of applicants.

12.105 Standards for awards.

12.106 Allowable fees and expenses.

12.107 Rulemaking on maximum rates for attorney fees.

12.108 Awards against other agencies.

12.109 Decisionmaking authority.

Subpart B--Information Required From Applicants

12.201 Contents of application.

12.202 Net worth exhibit.

12.203 Documentation of fees and expenses.

12.204 When an application may be filed.

Subpart C--Procedures for Considering Applications

12.301 Filing and service of documents.

12.302 Answer to application.

12.303 Reply.

12.304 Comments by other parties.

12.305 Settlement.

12.306 Further proceedings.

12.307 Decision.

12.308 Agency review.

12.309 Judicial review.

12.310 Payment of award.

Authority: Sec. 203(a)(1), Pub. L. 96-481, 94 Stat. 2325 (5

U.S.C. 504(c)(1)); Pub. L. 99-80, 99 Stat. 183.

Subpart A--General Provisions

Sec. 12.101 Purpose.

The purpose of this Part is to state the regulatory requirements

for award of attorney fees to eligible individuals and entities in

certain administrative proceedings before the Nuclear Regulatory

Commission, in implementation of the Equal Access to Justice Act, 5

U.S.C. 504 (EAJA), which provides for the award of attorney fees and

other expenses to parties to ``adversary adjudications'', as defined in

5 U.S.C. 504(b)(1)(C). In general, an ``adversary adjudication'' is an

adjudication that is required by statute to be determined on the record

after opportunity for hearing before an agency of the United States and

in which the position of the agency, or any component of the agency, is

presented by an attorney or other representative who enters an

appearance and participates in the proceeding. However, some agency

adjudications are expressly excluded from coverage by 5 U.S.C. 504

(e.g., an adjudication for the purpose of granting or renewing a

license) even though they fall within this general definition, and

certain appeals before an agency board of contract appeals and Program

Fraud Civil Remedies Act hearings conducted under 31 U.S.C. ch. 38 are

expressly covered.

An eligible party may receive an award in an adversary adjudication

when the party prevails over the Commission, unless the Commission's

position was substantially justified or special circumstances make an

award unjust. The regulations in this part describe the parties

eligible for awards and the proceedings that are covered. They also

explain how to apply for awards, and the procedures and standards that

the Commission will use to make them.

Sec. 12.102 When the EAJA applies.

The EAJA applies to any covered adversary adjudication pending or

commenced before the Commission on or after August 5, 1985.

Sec. 12.103 Proceedings covered.

(a) The EAJA applies to the following proceedings:

(1) Hearings under the Program Fraud Civil Remedies Act (31 U.S.C.

3801-12);

(2) Any appeal of a decision made pursuant to section 6 of the

Contract Disputes Act of 1978 (41 U.S.C. 605) before an agency board of

contract appeals as provided in section 8 of that Act (41 U.S.C. 607);

and

(3) Adversary adjudications conducted by the Commission pursuant to

any other statutory provision that requires a proceeding before the

Nuclear Regulatory Commission to be so conducted as to fall within the

meaning of ``adversary adjudication'' under 5 U.S.C. 504(b)(1)(C).

(b) The Commission's failure to identify a type of proceeding as an

adversary adjudication shall not preclude the filing of an application

by a party who believes the proceeding is covered by the EAJA. Whether

the proceeding is covered will then be an issue for resolution in

proceedings on the application.

(c) If a proceeding includes both matters covered by the EAJA and

matters specifically excluded from coverage, any award made will

include only fees and expenses related to covered issues.

Sec. 12.104 Eligibility of applicants.

(a) To be eligible for an award of attorney fees and other expenses

under the EAJA, the applicant must be a party to the adversary

adjudication for which it seeks an award. The term ``party'' is defined

in 5 U.S.C. 551(3). The applicant must show that it meets all

conditions of eligibility set out in this subpart and in subpart B.

(b) The types of eligible applicants are as follows:

(1) An individual with a net worth of not more than $2 million;

(2) The sole owner of an unincorporated business who has a net

worth of not more than $7 million, including both personal and business

interests, and not more than 500 employees;

(3) A charitable or other tax-exempt organization described in

section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))

with not more than 500 employees;

(4) A cooperative association as defined in section 15(a) of the

Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500

employees; and

(5) Any other partnership, corporation, association, unit of local

government, or organization with a net worth of not more than $7

million and not more than 500 employees.

(c) For the purpose of eligibility, the net worth and number of

employees of an applicant shall be determined as of the date the

proceeding was initiated.

(d) An applicant who owns an unincorporated business will be

considered as an ``individual'' rather than a ``sole owner of an

unincorporated business'' if the issues on which the applicant prevails

are related primarily to personal interests rather than to business

interests.

(e) The employees of an applicant include all persons who regularly

perform services for remuneration for the applicant, under the

applicant's direction and control. Part-time employees shall be

included on a proportional basis.

(f) The net worth and number of employees of the applicant and all

of its affiliates shall be aggregated to determine eligibility. Any

individual, corporation, or other entity that directly or indirectly

controls or owns a majority of the voting shares or other interests of

the applicant, or any corporation or other entity of which the

applicant directly or indirectly owns or controls a majority of the

voting shares or other interest, will be considered an affiliate for

purposes of this part, unless the adjudicative officer determines that

such treatment would be unjust and contrary to the purposes of the Act

in light of the actual relationship between the affiliated entities. In

addition, the adjudicative officer may determine that financial

relationships of the applicant other than those described in this

paragraph constitute special circumstances that would make an award

unjust.

(g) An applicant that participates in a proceeding primarily on

behalf of one or more other persons or entities that would be

ineligible is not itself eligible for an award.

Sec. 12.105 Standards for awards.

(a) A prevailing applicant may receive an award for fees and

expenses incurred in connection with a proceeding or a significant and

discrete substantive portion of the proceeding, unless the position of

the Commission over which the applicant has prevailed was substantially

justified. The position of the Commission includes, in addition to the

position taken by the Commission in the adversary adjudication, the

action or failure to act by the Commission upon which the adversary

adjudication is based. The burden of proof that an award should not be

made to a prevailing applicant because the Commission's position was

substantially justified is on the Commission counsel.

(b) An award will be reduced or denied if the applicant has unduly

or unreasonably protracted the proceeding or if special circumstances

make the award sought unjust.

Sec. 12.106 Allowable fees and expenses.

(a) Awards will be based on rates customarily charged by persons

engaged in the business of acting as attorneys, agents, and expert

witnesses, even if the services were made available without charge or

at reduced rate to the applicant.

(b) No award for the fee of an attorney or agent under this part

may exceed $75.00 per hour. No award to compensate an expert witness

may exceed the highest rate at which the Commission pays expert

witnesses. However, an award may also include the reasonable expenses

of the attorney, agent, or witness as a separate item, if the attorney,

agent, or witness ordinarily charges clients separately for these

expenses.

(c) In determining the reasonableness of the fee sought for an

attorney, agent, or expert witness, the adjudicative officer shall

consider the following:

(1) If the attorney, agent, or witness is in private practice, his

or her customary fees for similar services, or, if an employee of the

applicant, the fully allocated costs of the services;

(2) The prevailing rate for similar services in the community in

which the attorney, agent, or witness ordinarily performs services;

(3) The time actually spent in the representation of the applicant;

(4) The time reasonably spent in light of the difficulty or

complexity of the issues in the proceeding; and

(5) Other factors that bear on the value of the services provided.

(d) The reasonable cost of any study, analysis, engineering report,

test, project, or similar matter prepared on behalf of a party may be

awarded, to the extent that the charge for the services does not exceed

the prevailing rate for similar services, and the study or other matter

was necessary for preparation of applicant's case.

Sec. 12.107 Rulemaking on maximum rates for attorney fees.

(a) If warranted by an increase in the cost of living or by special

circumstances (such as limited availability of attorneys qualified to

handle certain types of proceedings), the Commission may adopt

regulations providing that attorney fees may be awarded at a rate

higher than $75 per hour in some, or all of the types of proceedings

covered by this part. The Commission will conduct any rulemaking

proceedings for this purpose under the informal rulemaking procedures

of the Administrative Procedure Act.

(b) Any person may file with the Commission a petition for

rulemaking to increase the maximum rate for attorney fees, in

accordance with the requirements of 10 CFR 2.802. The petition should

identify the rate the petitioner believes the Commission should

establish and the types of proceedings in which the rate should be

used. It should also explain fully the reasons why the higher rate is

warranted. Within 90 days after the petition is filed, the Commission

will determine whether it will initiate a rulemaking proceeding, deny

the petition, or take other appropriate action on the petition. The

Commission will act on the petition in accordance with 10 CFR 2.803.

Sec. 12.108 Awards against other agencies.

If an applicant is entitled to an award because it prevails over

another agency of the United States that participates in a proceeding

before the Commission and takes a position that is not substantially

justified, the award or an appropriate portion of the award shall be

made against that agency.

Sec. 12.109 Decisionmaking authority.

Unless otherwise ordered by the Commission in a particular

proceeding, each application under this part shall be assigned for

decision to the official or decisionmaking body that entered the

decision in the adversary adjudication. That official or decisionmaking

body is referred to in this part as the ``adjudicative officer.''

Subpart B--Information Required From Applicants

Sec. 12.201 Contents of application.

(a) An application for an award of fees and expenses under the EAJA

shall identify the applicant and the proceeding for which an award is

sought. The application shall show that the applicant has prevailed and

identify the position of the Commission or other agency that the

applicant alleges was not substantially justified. Unless the applicant

is an individual, the application shall also state the number of

employees of the applicant and describe briefly the type and purpose of

its organization or business.

(b) The application shall also include a statement that the

applicant's net worth does not exceed $2 million (if an individual) or

$7 million (for all other applicants, including their affiliates).

However, an applicant may omit this statement if:

(1) The applicant attaches a copy of a ruling by the Internal

Revenue Service that it qualifies as an organization described in

section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))

or, in the case of a tax-exempt organization not required to obtain a

ruling from the Internal Revenue Service on its exempt status, a

statement that describes the basis for the applicant's belief that it

qualifies under this section; or

(2) The applicant states that it is a cooperative association as

defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C.

1141j(a)).

(c) The application shall state the amount of fees and expenses for

which an award is sought.

(d) The application may also include any other matters that the

applicant wishes the Commission to consider in determining whether, and

in what amount, an award should be made.

(e) The application shall be signed by the applicant or an

authorized officer or attorney of the applicant. It shall also contain

or be accompanied by a written verification under oath or under penalty

of perjury that the information provided in the application is true and

correct.

Sec. 12.202 Net worth exhibit.

(a) Each applicant, except a qualified tax-exempt organization or

cooperative association must provide with its application a detailed

exhibit showing the net worth of the applicant and any affiliates (as

defined in Sec. 12.104(f) of this part) when the proceeding was

initiated. The exhibit may be in any form convenient to the applicant

that provides full disclosure of the applicant's and its affiliates'

assets and liabilities and is sufficient to determine whether the

applicant qualifies under the standards in this part. The adjudicative

officer may require an applicant to file additional information to

determine its eligibility for an award.

(b) Ordinarily, the net worth exhibit will be included in the

public record of the proceeding. However, an applicant that objects to

public disclosure of information in any portion of the exhibit and

believes there are legal grounds for withholding it from disclosure may

submit that portion of the exhibit directly to the adjudicative officer

in a sealed envelope labeled ``Confidential Financial Information,''

accompanied by a motion to withhold the information from public

disclosure. The motion shall describe the information sought to be

withheld and explain, in detail, why it falls within one or more of the

specific exemptions from mandatory disclosure under the Freedom of

Information Act, 5 U.S.C. 552(b)(1)-(9), why public disclosure of the

information would adversely affect the applicant, and why disclosure is

not required in the public interest. The material in question shall be

served on counsel representing the agency against which the applicant

seeks an award, but need not be served on any other party to the

proceeding. If the adjudicative officer finds that the information

should not be withheld from disclosure, it shall be placed in the

public record of the proceeding. Otherwise, any request to inspect or

copy the exhibit shall be disposed of in accordance with the

Commission's established procedures under the Freedom of Information

Act, 10 CFR part 9, subpart A.

Sec. 12.203 Documentation of fees and expenses.

The application shall be accompanied by full documentation of the

fees and expenses, including the cost of any study, analysis,

engineering report, test, project, or similar matter for which an award

is sought. A separate itemized statement shall be submitted for each

professional firm or individual whose services are covered by the

application, showing the hours spent in connection with the proceeding

by each individual, a description of the specific services performed,

the rates at which each fee has been computed, any expenses for which

reimbursement is sought, the total amount claimed, and the total amount

paid or payable by the applicant or by any other person or entity for

the services provided. The adjudicative officer may require the

applicant to provide vouchers, receipts, logs, or other substantiation

for any fees or expenses claimed, pursuant to Sec. 12.306 of this part.

Sec. 12.204 When an application may be filed.

(a) An application may be filed whenever the applicant has

prevailed in the proceeding or in a significant and discrete

substantive portion of the proceeding, but in no case later than 30

days after the date on which a decision or order disposing of the

merits of the proceeding or any other complete resolution of the

proceeding, such as a settlement or voluntary dismissal, becomes final

and unappealable, both within the NRC and to the courts.

(b) If after the filing of an application for an award, review or

reconsideration is sought or taken of a decision as to which an

applicant believes it has prevailed, proceedings for the award of fees

shall be stayed pending final disposition of the underlying

controversy. When the United States appeals the underlying merits of an

adversary adjudication to a court, no decision on an application for

fees and other expenses in connection with that adversary adjudication

shall be made until a final and unreviewable decision is rendered by

the court on the appeal or until the underlying merits of the case have

been finally determined pursuant to the appeal.

Subpart C--Procedures for Considering Applications

Sec. 12.301 Filing and service of documents.

Any application for an award or other pleading or document related

to an application shall be filed and served on all parties to the

proceeding in the same manner as other pleadings in the proceeding,

except as provided in Sec. 12.202(b) for confidential financial

information.

Sec. 12.302 Answer to application.

(a) Within 30 days after service of an application, counsel

representing the NRC against which an award is sought may file an

answer to the application. Unless the NRC counsel requests an extension

of time for filing or files a statement of intent to negotiate under

paragraph (b) of this section, failure to file an answer within the 30-

day period may be treated as a consent to the award requested.

(b) If the NRC counsel and the applicant believe that the issues in

the fee application can be settled, they may jointly file a statement

of their intent to negotiate a settlement. The filing of this statement

shall extend the time for filing an answer for an additional 30 days,

and further extensions may be granted by the adjudicative officer upon

request by the NRC counsel and the applicant.

(c) The answer shall explain in detail any objections to the award

requested and identify the facts relied on in support of the NRC

counsel's position. If the answer is based on any alleged facts not

already in the record of the proceeding, the NRC counsel shall include

with the answer either supporting affidavits or a request for further

proceedings under Sec. 12.306.

Sec. 12.303 Reply.

Within 15 days after service of an answer, the applicant may file a

reply. If the reply is based on any alleged facts not already in the

record of the proceeding, the applicant shall include with the reply

either supporting affidavits or a request for further proceedings under

Sec. 12.306.

Sec. 12.304 Comments by other parties.

Any party to a proceeding other than the applicant and the NRC

counsel may file comments on an application within 30 days after it is

served, or on an answer within 15 days after it is served. A commenting

party may not participate further in proceedings on the application

unless the adjudicative officer determines that the public interest

requires participation in order to permit full exploration of matters

raised in the comments.

Sec. 12.305 Settlement.

The applicant and the NRC counsel may agree on a proposed

settlement of the award before final action on the application, either

in connection with a settlement of the underlying proceeding, or after

the underlying proceeding has been concluded, in accordance with the

NRC's standard settlement procedure. If a prevailing party and the

NRC's counsel agree on a proposed settlement of an award before an

application has been filed, the application shall be filed with the

proposed settlement.

Sec. 12.306 Further proceedings.

(a) Ordinarily, the determination of an award will be made on the

basis of the written record. However, on request of either the

applicant or the NRC counsel, or on the adjudicative officer's own

initiative, the adjudicative officer may order further proceedings,

such as an informal conference, oral argument, additional written

submissions or, as to issues other than substantial justification (such

as the applicant's eligibility or substantiation of fees and expenses),

pertinent discovery or an evidentiary hearing. Further proceedings

shall be held only when necessary for full and fair resolution of the

issues arising from the application, and shall be conducted as promptly

as possible. Whether or not the position of the agency was

substantially justified shall be determined on the basis of the

administrative record, as a whole, which is made in the adversary

adjudication for which fees and other expenses are sought.

(b) A request that the adjudicative officer order further

proceedings under this section shall specifically identify the

information sought or the disputed issues and shall explain why the

additional proceedings are necessary to resolve the issues.

Sec. 12.307 Decision.

(a) The adjudicative officer shall issue an initial decision on the

application within 90 days after completion of proceedings on the

application. If the adjudicative officer fails to issue an initial

decision within 90 days, he or she shall notify the parties of the

reason for the delay and shall set a new deadline.

(b) The initial decision shall include written findings and

conclusions on the applicant's eligibility and status as a prevailing

party, and an explanation of the reasons for any difference between the

amount requested and the amount awarded. The decision shall also

include, if at issue, findings on whether the NRC's position was

substantially justified, whether the applicant unduly protracted the

proceedings, or whether special circumstances make an award unjust. If

the applicant has sought an award against more than one agency, the

decision shall allocate responsibility for payment of any award made

among the agencies, and shall explain the reasons for the allocation

made.

Sec. 12.308 Agency review.

(a) Either the applicant or the NRC counsel may seek review of the

initial decision on the fee application, or the Commission may decide

to review the decision on its own initiative, in accordance with the

Commission's review procedures set out in 10 CFR 2.786. The filing of a

petition for review is mandatory for a party to exhaust its

administrative remedies before seeking judicial review. If neither the

applicant nor NRC counsel seeks review and the Commission does not take

review on its own initiative, the initial decision on the application

shall become a final decision of the NRC forty (40) days after it is

issued.

(b) Notwithstanding anything to the contrary in any other part of

the Commission's regulations, the initial decision shall be inoperative

(i.e., the decision shall not be final and any award made shall not be

paid) until the later of--

(1) The expiration of the forty-day period provided in paragraph

(a) of this section; or

(2) If within the forty-day period provided in paragraph (a) of

this section the Commission elects to review the decision, the

Commission's issuance of a final decision on review of the initial

decision.

(c) Whether to review a decision on its own motion is a matter

within the discretion of the Commission. If review is taken, the

Commission will issue a final decision on the application or remand the

application to the adjudicative officer for further proceedings.

Sec. 12.309 Judicial review.

Judicial review of final agency decisions on awards may be sought

as provided in 5 U.S.C. 504(c)(2).

Sec. 12.310 Payment of award.

An applicant seeking payment of an award shall submit to the

appropriate official of the paying agency a copy of the Commission's

final decision granting the award, accompanied by a certification that

the applicant will not seek review of the decision in the United States

courts. Where the award is granted against the Commission, the

applicant shall make the submission to the Director, Division of

Accounting and Finance, Office of the Controller, U.S. Nuclear

Regulatory Commission, Washington, DC 20555. The NRC will pay the

amount awarded to the applicant within 60 days.

Dated at Rockville, Maryland, this 29th day of April 1994.

For the Nuclear Regulatory Commission.

John C. Hoyle,

Assistant Secretary of the Commission.

[FR Doc. 94-10729 Filed 5-4-94; 8:45 am]

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