Select Milk Producers, Inc. v. Johanns

400 F.3d 939, 365 U.S. App. D.C. 183, 2005 U.S. App. LEXIS 4492, 2005 WL 627076
CourtCourt of Appeals for the D.C. Circuit
DecidedMarch 18, 2005
Docket04-5145
StatusPublished
Cited by93 cases

This text of 400 F.3d 939 (Select Milk Producers, Inc. v. Johanns) 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
Select Milk Producers, Inc. v. Johanns, 400 F.3d 939, 365 U.S. App. D.C. 183, 2005 U.S. App. LEXIS 4492, 2005 WL 627076 (D.C. Cir. 2005).

Opinions

Opinion for the Court filed by Circuit Judge EDWARDS.

Dissenting opinion filed by Circuit Judge HENDERSON.

HARRY T. EDWARDS, Circuit Judge.

The Secretary of Agriculture (“Secretary”) appeals the District Court’s award of attorney’s fees and costs to several milk marketing cooperatives under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412 (2000). The underlying litigation involved a dispute between' the cooperatives and the Secretary over the price of Class III butterfat. The Secretary argues that the District Court erred in concluding that the milk cooperatives were “prevailing parties” under EAJA and in calculating the amount of the award.

The price of raw milk and its component parts is governed by a complex regulatory regime known as the Federal Milk Marketing Orders (“FMMO”). The Secretary administers the FMMO pursuant to authority under the Agricultural Marketing Agreement Act (“AMAA”), 7 U.S.C. § 601 et seq. (2000). Prior to 2000, the price under the FMMO for Class III butterfat (which is used to make hard cheeses) was the same as the price for Class IV butterfat (which is used to make butter and nonfat dry milk). In December of that year, the Secretary promulgated a rule creating a separate price for Class III butterfat. The new price, which was to be announced on February 2, 2001, would have applied retroactively to transactions that had taken place in January 2001. See Select Milk Producers, Inc. v. Veneman, 304 F.Supp.2d 45, 48-49 (D.D.C.2004).

Select Milk Producers, Inc., Continental Dairy Products, Inc., and Elite Milk Producers, Inc. (collectively “Milk Producers”) are milk marketing cooperatives, which would have been subject to an immediate loss of an estimated $5,000,000 if the new price for Class III butterfat had taken effect. Id. at 53. On January 31, 2001, the District Court granted Milk Producers’ motion for a preliminary injunction enjoining the Secretary from imposing a separate price for Class III butterfat. The Government- did not appeal the preliminary injunction or otherwise seek to defend its position. Instead, the Secretary issued a new rule that did not include a separate price for Class III butterfat. The parties then stipulated to dismissal of the case as moot. See id. at 49-50.

On May 30, 2003, Milk Producers moved for an award of attorney’s fees and costs under EAJA, which allows “prevailing parties” to obtain expenses in litigation against the federal government unless the Government’s position is substantially justified. See 28 U.S.C. § 2412(d)(1)(A). The District Court concluded that Milk Producers were “prevailing parties” under EAJA and that the Secretary’s position in seeking to implement the separate price for Class III butterfat was not substantially justified. Therefore, the court held that Milk Producers were entitled to attorney’s fees and costs. See Select Milk, 304 F.Supp.2d at 50-54. The District Court also determined that two of Milk Producers’ attorneys should be compensated for some of their hours at rates above EAJA’s statutory cap, because the attorneys’ expertise in the milk marketing regime was a “special factor” that warranted an enhanced fee under the statute. See id. at 55-57.

On appeal, the Secretary argues, that Milk Producers were not “prevailing parties” under EAJA, and that, even if appel-lees were “prevailing parties,” the District Court’s fee enhancement award was an [942]*942abuse of discretion. We affirm in part and reverse in part. First, we find that the preliminary injunction at issue in this case was a judgment that resulted in a court-ordered change in the legal relationship between the parties and gave Milk Producers the concrete and irreversible redress that they sought. Given these circumstances, Milk Producers are “prevailing parties” under EAJA. Second, we reverse the District Court’s fee enhancement award. The established law of the circuit makes it clear that legal expertise acquired through practice is not a “special factor” justifying an enhanced fee award under EAJA.

I. Background '

The factual background of this case is recited at length in the District Court’s opinion. See Select Milk Producers, Inc. v. Veneman, 304 F.Supp.2d 45 (D.D.C.2004) (“Select Milk ”). Therefore, there is no need here for a detailed statement of facts. Rather, we will focus on the facts that are relevant to the disposition of this appeal.

The FMMO is a complex regulatory regime governing the price of raw milk and its components. Id. at 48. In order to amend market prices under the FMMO, the Secretary must provide notice and an opportunity for a hearing. See 7 U.S.C. § 608c(3) (2000). Under agency regulations, before conducting a hearing, the Secretary must first issue a Notice of Hearing, which, among other things, delineates the scope of the hearing. See 7 C.F.R. § 900.4(a) (2004). An Administrative Law Judge (“ALJ”) then presides over the hearing, and, following the hearing, the Secretary issues a decision on the proposed amendment. See id. §§ 900.6, 900.13a. To become effective, the amendment must be ratified by a designated number of milk producers. See 7 U.S.C. § 608c(8), (9); 7 C.F.R. § 900.14.

In the Consolidated Appropriations Act of 2000, Pub.L. No. 106-113, 113 Stat. 1501 (1999), Congress directed the Secretary to conduct emergency rulemaking to amend the FMMO. The statute instructed the Secretary to issue amended regulations by December 1, 2000, and implement the resulting formulas for milk pricing by January 1, 2001. See id. Div. B., § 1008(a)(8), 113 Stat. 1536, 1501A-518. In response to this legislation, the Secretary published a Notice of Hearing in the Federal Register in April 2000, listing various proposals to amend the FMMO. See Milk in the Northeast and Other Marketing Areas; Notice of Hearing on Class III and Class IV Milk Pricing Formulas, 65 Fed.Reg. 20,094 (Apr. 14, 2000) (“April Notice”). Prior to the April Notice, the price for Class III butterfat had been the same as the price for Class IV butterfat, and the notice did not propose the creation of a separate price for Class III butterfat. In May 2000, an ALJ presided over a five-day hearing on the proposed amendments. During the hearing, one of the participants sought to raise the possibility of imposing a separate price for Class III butterfat. However, with the agreement of the Secretary’s representative, the ALJ concluded that the issue was beyond the scope of the hearing. See Select Milk, 304 F.Supp.2d at 48.

Thus, it is uncontested that the Secretary never gave notice of the possibility of a separate price for Class III butterfat, and this matter was never pursued as an issue in the hearing before the ALJ. Nonetheless, in December 2000, the Secretary issued a tentative final decision that, inter alia, created a separate price for Class III butterfat.

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Bluebook (online)
400 F.3d 939, 365 U.S. App. D.C. 183, 2005 U.S. App. LEXIS 4492, 2005 WL 627076, Counsel Stack Legal Research, https://law.counselstack.com/opinion/select-milk-producers-inc-v-johanns-cadc-2005.