Moody v. United States

640 F. Supp. 184, 1986 U.S. Dist. LEXIS 22346
CourtDistrict Court, S.D. Texas
DecidedJuly 24, 1986
DocketCiv. A. G-82-498
StatusPublished

This text of 640 F. Supp. 184 (Moody v. United States) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Moody v. United States, 640 F. Supp. 184, 1986 U.S. Dist. LEXIS 22346 (S.D. Tex. 1986).

Opinion

[185]*185ORDER

HUGH GIBSON, District Judge.

Before the Court is the defendant United States’ motion for summary judgment on the issue of attorneys’ fees. The Court tried this case on January 9-10, 1985 and rendered judgment in favor of the plaintiff. The defendant now contends, inter alia, that plaintiff cannot recover attorneys’ fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, because the defendant’s position was “substantially justified.” This Court agrees.

Procedural & Factual Background

This action arose from the mailing of a rare, antique gold coin on or about December 1, 1981. Plaintiff Shearn Moody, Jr., the owner of the gold coin, entered into a contract with Goliad Corp., whereby Goliad agreed to sell the coin on plaintiff’s behalf for $50,000.00. Plaintiff’s agent packaged the coin, insured the package, and mailed it to Goliad. The package reached Goliad, but the gold coin inside was missing.

Unknown to plaintiff’s agent, the Postal Service Mail Manual limited the United States’ liability for insured parcels to $25,-000.00. The postal fee paid at the time the package was mailed included the premium for the maximum amount of indemnity insurance available — $25,000.00. A receipt noting the indemnity limit was duly given to plaintiff’s agent at the time of mailing.

Plaintiff filed suit to recover the value of the coin, contending, inter alia, that either the Postal Service or Goliad was accountable for the mystery of the missing coin. Goliad denied liability. The United States maintained that it delivered the package intact and that someone removed the coin after delivery. Since the law that governed the litigation was established and settled, the parties’ disagreements did not involve different interpretations of the applicable law. Instead, the parties vehemently disputed the factual question of who was responsible for the loss.

After a bench trial 1, the Court found the United States liable, but limited liability to $25,000.00 based on existing postal regulations. Finding plaintiff to be an individual whose net worth exceeded $1 million, the Court denied plaintiff’s request for attorneys’ fees.2

Upon appeal, the Fifth Circuit affirmed this Court’s findings of liability, but remanded the issue of attorneys’ fees because the net worth limitation established under the Act had been raised to $2,000,000 during the pendency of the appeal, 783 F.2d 1244.

Discussion

Upon remand, this Court is confronted with the following novel question: Did the United States maintain a “substantially justified” position for purposes of EAJA recovery where its main defense during the litigation consisted of a supportable fact recitation different from that advanced by the plaintiff? This Court answers in the [186]*186positive, and holds that when the applicable law is established, a genuine factual dispute satisfies the EAJA’s “substantial justification” test.3

Under the express terms of the EAJA, 28 U.S.C. § 2412(d)(1)(A), an award of attorneys’ fees against the United States is barred if the “position of the United States” is “substantially justified.” The burden of showing substantial justification rests with the government. S & H Riggers & Erectors, Inc. v. Occupational Safety & Health Review Commission, 672 F.2d 426, 430 (5th Cir.1982).

The 1985 Amendment to the EAJA, Pub.L.No. 99-80 § 2(c)(2), defines “position of the United States” as the government agency’s action or failure to act upon which the civil action is based, in addition to the position taken by the United States in the lawsuit. See 28 U.S.C. § 2412(d)(2)(D). See also Bazaldua v. United States Immigration and Naturalization Service, 776 F.2d 1266 (5th Cir.1985). The Act, however, is silent on what constitutes “substantial justification.” Courts have consistently defined a “substantially justified position” as one having a “reasonable basis both in law and in fact” (emphasis added). See Russell v. National Mediation Board, 775 F.2d 1284, 1289 (5th Cir.1985); Bazaldua, supra, 776 F.2d at 1269; Natchez Coca-Cola Bottling Co. v. NLRB, 750 F.2d 1350, 1352 (5th Cir.1985); Southern Oregon Citizens Against Toxic Sprays, Inc. v. Clark, 720 F.2d 1475, 1481 (9th Cir.1983); United States v. 341.45 Acres of Land, 751 F.2d 924, 939 (8th Cir.1984); United States v. 2,116 Boxes of Boned Beef, 726 F.2d 1481, 1486 (10th Cir.1984). This language is apparently adopted from passages of legislative history explaining the EAJA. See H.R.Rep. No. 1418, 9th Cong., 2d Sess., 10-11, reprinted in 1980 U.S.Code Cong. & Ad.News 4953, 4984, 4989-90.4

In the case at bar, the government did not attempt to advance untenable legal positions. It did not raise legal arguments not supported by law or contrary to law. The government’s factual contentions were supported by evidence, thereby creating a genuine dispute requiring resolution by a fact finder. The government’s proof revealed, based on forensic examination and scientific evidence, that the package in question had to have been opened from the top before the end cut on the envelope was made.

Even if this Court was not persuaded by the government’s proof, it must conclude that the United States’ position has reasonable basis both in law and in fact. The government is substantially justified in litigating a genuine issue of fact even when it has not contested the law. See Snowbank Enterprises, Inc. v. United States, 7 Cl.Ct. 388 (U.S.Cl.Ct.1985); Hedstrom Lumber Co. v. United States, 7 Cl.Ct. 510 (U.S.Cl. Ct.1985). Where the resolution of the case turns solely upon an assessment of the probative value of the evidence, the government maintains a substantially justified litigating position in putting the plaintiff to his or her burden of proof. Alger v. United States, 741 F.2d 391 (Fed.Cir.1984); see also Spencer v. NLRB, 712 F.2d 539, 564 (D.C.Cir.1983), cert. denied, 466 U.S. 936, 104 S.Ct. 1908, 80 L.Ed.2d 457 (1984) (dictum).

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640 F. Supp. 184, 1986 U.S. Dist. LEXIS 22346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moody-v-united-states-txsd-1986.