Goldhaber v. Foley

698 F.2d 193, 69 A.L.R. Fed. 120
Court of Appeals for the Third Circuit·Decided January 17, 1983·No. No. 82-1254·Published·Cited by 68 cases

Opinions

[194]*194OPINION OF THE COURT

GARTH, Circuit Judge.

This appeal requires that we determine whether the phrase “unless ... the position of the United States was substantially justified” in the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A) (Supp. IV 1980), requires that a plaintiff be denied attorneys’ fees when, in an action against the United States, the United States succeeds in its defense against one of plaintiff’s claims, but does not prevail in its defense against the second of plaintiff’s claims.

Because we conclude that the substantial justification of the United States in defending against one of plaintiff’s claims does not render the position of the United States “substantially justified” when a litigant obtains the desired relief under a second claim, we reverse.

I.

Appellants Katz and Mattis [hereinafter Katz] are reporters for the bankruptcy court for the Eastern District of Pennsylvania. They1 initiated this action against William Foley, Director of the Administrative Office of the United States Courts (“A.O.”), and two other court reporters, Abovitz and Nitchie, seeking an injunction restraining the A.O. from engaging Abovitz and Nitchie as reporters for the bankruptcy court. Katz advanced two theories in support of an injunction. He maintained (1) that Congress vested the authority to hire bankruptcy court reporters in the bankruptcy courts, not in the A.O., and (2) that the A.O. acted arbitrarily, capriciously, and in disregard of its own bid specifications in hiring Abovitz and Nitchie.

The district court rejected Katz’s “authority” claim, but approved of Katz’s second claim, finding that Abovitz and Nitchie “fail[ed] to meet any of the three standards set forth in ... the bid solicitation under Item 5, Qualifications of Reporters.” Goldhaber v. Foley, 519 F.Supp. 466, 471 (E.D.Pa.1981).2 Accordingly, the district court preliminarily enjoined the A.O. from awarding a contract for court reporting services to Abovitz, Nitchie, or any other bidder that did not qualify under the bid solicitation. Shortly thereafter the bid solicitation expired, and Katz and the A.O. stipulated that the action should be dismissed as moot. Katz has remained in his position as a court reporter for the bankruptcy court.

Katz then sought attorneys’ fees and expenses under the Equal Access to Justice Act, 28 U.S.C. § 2412 (Supp. IV 1980). Section (d)(1)(A) of the Act provides that the court “shall award to a prevailing party other than the United States” fees and expenses, “unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.”3 Katz contended [195]*195that he was the “prevailing party” within the meaning of the Act and that the A.O. was not “substantially justified” in litigating the action. The government lacked substantial justification, Katz reasoned, because, on three occasions prior to the initiation of the action, the A.O. had been advised that Abovitz and Nitchie were unqualified to serve as bankruptcy court reporters. Katz argued that because the government “had notice that it was acting arbitrarily and capriciously” prior to the institution of the action, the A.O. was unjustified in defending the suit.

In an opinion delivered from the bench on March 19, 1982, the district court disposed summarily of Katz’s contention that the government acted without “substantial justification” because the A.O. had been notified before trial that Abovitz and Nitchie were unqualified as reporters. “It is the government’s reasonableness as a litigant that we must assess,” the district court concluded, “not whether the [government’s] prior actions which gave rise to the case were unreasonable.” App. at 142.

The district court did not decide whether Katz was a “prevailing party” or whether the government was “substantially justified” in defending against Katz’s claim that the A.O. acted arbitrarily and capriciously in hiring Abovitz and Nitchie because they did not qualify under the bid specifications. Rather, the district court concluded, the A.O. was plainly justified in defending against the first claim advanced by Katz: that Congress vested the authority to hire bankruptcy court reporters in the bankruptcy courts, not in the A.O. Because the government was substantially justified in defending against Katz’s threshold claim of “no authority,” the district court reasoned that the government was substantially justified in defending the entire action. The court reasoned that:

the mere fact that the government lost on this one issue does not mean that their position in the entire case was not substantially justified. We believe the Act contemplates a view of the entire proceedings, not an issue-by-issue analysis. The government need not produce a flawless case. Congress’ choice of the word “substantially” indicates that there is some room for error. Taken as a whole, it is our view that the government was “substantially justified” in taking the position it did in this matter.

App. at 144.

On March 26, 1982, the district court entered an order denying Katz’s application for attorneys’ fees and expenses. This appeal followed. We have jurisdiction under 28 U.S.C. § 1291 (1976).

II.

Congress intended that the Equal Access to Justice Act remove an obstacle to contesting unreasonable governmental action through litigation. The House Report accompanying the Act finds that certain parties may be deterred from challenging governmental conduct because of the expense involved in vindicating their rights. See H.R.Rep. No. 1418, 96th Cong., 2d Sess. 5, 9, reprinted in 1980 U.S.Code Cong. & Ad. News 4984, 4988 [hereinafter House Report]. Accordingly, the Act provides for an award of attorneys’ fees and expenses to parties prevailing against the United States.

Section 2412(b) of the Act permits an assessment of fees and expenses against the United States to the same extent that a private party would be liable. 28 U.S.C. 2412(b) (Supp. IY 1980). The decision to award fees under section 2412(b) rests with the discretion of the district court. See House Report, supra, at 9, 17, 1980 U.S. Code Cong. & Ad.News at 4987, 4996. Section 2412(d), in contrast, directs that the district courts “shall award” fees and expenses to a prevailing party unless the court finds that the position of the United [196]*196States was “substantially justified.” 28 U.S.C. § 2412(d)(1)(A) (Supp. IV 1980).

This appeal raises two issues regarding the meaning of the phrase “the position of the United States” in section 2412(d). Katz argues first that the words “the position of the United States” refer to the conduct of the government before his complaint was filed as well as its position on his claims after the action began.

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Goldhaber v. Foley, 698 F.2d 193, 69 A.L.R. Fed. 120 (3d Cir. 1983).

698 F.2d 193 (Goldhaber v. Foley) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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