Nat'l Venture Capital Ass'n v. Nielson

318 F. Supp. 3d 145
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 13, 2018
DocketCivil Action No. 17-1912 (JEB)
StatusPublished
Cited by6 cases

This text of 318 F. Supp. 3d 145 (Nat'l Venture Capital Ass'n v. Nielson) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nat'l Venture Capital Ass'n v. Nielson, 318 F. Supp. 3d 145 (D.C. Cir. 2018).

Opinion

III. Analysis

The Government, wisely, does not contest that Plaintiffs were the prevailing parties in this case. After all, the Court awarded them complete relief, vacating the challenged Delay Rule in the process. Nor do Defendants dispute that Plaintiffs are financially eligible to receive an EAJA award. The Court, too, agrees that each Plaintiff has provided sufficient documentation in that respect. See ECF Nos. 31-1 (Declaration of Bobby Franklin); 31-2 (Declaration of Atma Krishna); 31-3 (Declaration of Anand Krishna); 31-4 (Declaration of Alex Modon); 31-5 (Declaration of Aksh Gupta).

The Government instead maintains that its actions were substantially justified, thereby precluding any award. Alternatively, it argues that the fees requested by Plaintiffs are unreasonable and asks the Court to reduce any award accordingly. The Court takes each position in turn.

A. Substantial Justification

"Once an applicant's status as a prevailing party is established, the government has the burden of showing that its legal position was substantially justified or that special circumstances make an award unjust." Taucher v. Brown-Hruska, 396 F.3d 1168, 1173 (D.C. Cir. 2005) (citation omitted). "The government's position is substantially justified if it is 'justified to a degree that could satisfy a reasonable person' or, in other words, has 'a reasonable basis both in law and fact.' " Id. (quoting Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) ). The agency must show "both" that (1) the "underlying agency action" and (2) "the arguments defending that action in court" satisfy that standard. See Halverson v. Slater, 206 F.3d 1205, 1208 (D.C. Cir. 2000) (emphasis added).

The Court begins with the "underlying agency action": the Delay Rule. Defendants promulgated that Rule without adhering to the APA's most basic requirements: that they provide "[g]eneral notice of [its] proposed rule making" in the Federal Register, as well as "an opportunity" for the public to comment before promulgating a rule. See 5 U.S.C. § 553(b), (c).

*150While an agency may waive those prerequisites for "good cause," the D.C. Circuit has repeatedly warned that the "the good cause exception" to the APA's notice-and-comment rule "is to be narrowly construed and only reluctantly countenanced." Mack Trucks, Inc. v. EPA, 682 F.3d 87, 93 (D.C. Cir. 2012) (quoting Util. Solid Waste Activities Grp. v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001) ). The APA "excuses notice and comment," it has stressed, only in "emergency situations, or where delay could result in serious harm." Jifry v. FAA, 370 F.3d 1174, 1179 (D.C. Cir. 2004) (citations omitted).

What was the "emergency" justifying the Delay Rule here? In a total of three paragraphs in the Federal Register, DHS offered two rationales for invoking the good-cause exception: (1) expense to the agency; and (2) potential confusion if the IE Final Rule were to take effect. See 82 Fed. Reg. at 31,888. Neither position "substantially justified" jettisoning the APA's notice-and-comment requirements.

First, "the expense of implementing the new parole system." NVCA, 291 F.Supp.3d at 17. The Court dismissed that concern, and although "the government can lose on the merits and nevertheless be found to have taken a substantially justified position," Taucher, 396 F.3d at 1173, this was not a close call. First, Defendants cited no cases (and still have marshaled none) for the proposition that an agency can invoke the good-cause exception simply to protect its own bottom line. See NVCA, 291 F.Supp.3d at 17. Even assuming it could, the Court of Appeals has reserved only the "possibility that a fiscal calamity could conceivably justify bypassing the notice-and-comment requirement." Sorenson Comm'ns Inc. v. FCC, 755 F.3d 702, 707 (D.C. Cir. 2014) (emphasis added). Far from establishing "fiscal peril," DHS made no "factual findings supporting the reality of the threat." Id. at 706. Indeed, it had previously found that the rule would not"generate additional processing costs to the government to process applications." 82 Fed. Reg. at 5,274. The agency thus lacked a "reasonable basis in law and fact" to skip notice and comment on that basis.

Nor does its justification fare better in hindsight. During litigation, DHS pitched the IE Final Rule as an "extraordinary change," which would require significant resources to implement. See NVCA, 291 F.Supp.3d at 18.

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Bluebook (online)
318 F. Supp. 3d 145, Counsel Stack Legal Research, https://law.counselstack.com/opinion/natl-venture-capital-assn-v-nielson-cadc-2018.