Taylor Group, Inc. v. Johnson

919 F. Supp. 1545, 40 Cont. Cas. Fed. 76,929, 1996 U.S. Dist. LEXIS 3323, 1996 WL 125646
CourtDistrict Court, M.D. Alabama
DecidedFebruary 28, 1996
DocketCA 94-D-1254-S
StatusPublished
Cited by7 cases

This text of 919 F. Supp. 1545 (Taylor Group, Inc. v. Johnson) is published on Counsel Stack Legal Research, covering District Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Taylor Group, Inc. v. Johnson, 919 F. Supp. 1545, 40 Cont. Cas. Fed. 76,929, 1996 U.S. Dist. LEXIS 3323, 1996 WL 125646 (M.D. Ala. 1996).

Opinion

MEMORANDUM OPINION AND JUDGMENT

DE MENT, District Judge.

Before the court is The Taylor Group, Inc.’s (“plaintiff’) application filed November 14, 1994, for attorneys’ fees, expenses and costs under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Under the EAJA, a “prevailing party in any civil action” may seek payment for fees, expenses and costs incurred by the attorneys in the litigation. 28 U.S.C. § 2412(a)(1) & (b). Such an award is mandatory unless the court “finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” Id. at § 2412(d)(1)(B).

In Taylor v. Johnson, 915 F.Supp. 295 (M.D.Ala.1995), 1 the court found that under the EAJA, the plaintiff was a “prevailing party” and that the United States had failed to sustain its burden of showing that its position was substantially justified. Based on the authority of National Treasury Employees Union v. Internal Revenue Service, 735 F.2d 1277 (11th Cir.1984), the court, however, reserved ruling on whether “special circumstances” warranted a denial of attorneys’ fees, expenses and costs. In National Treasury Employees Union, the Eleventh Circuit held that where, as here, a settlement agreement is silent regarding fees and the record does not contain an adequate factual basis to conclude that the prevailing party waived attorneys’ fees or that the United States assumed attorneys’ fees were not wanted, the court should hold an evidentiary hearing unless the parties can stipulate to the relevant facts. Id. at 1279.

Hence, in Taylor 1, the court ordered the parties to enter into a joint stipulation of the facts regarding the intent and discussions, if any, of attorneys’ fees during settlement negotiations. The parties have now done so and additionally provided several attorney affidavits and declarations. The court finds that the additional evidence provides a sufficient factual basis to rule on the plaintiffs EAJA application, thus, rendering a hearing unnecessary. For the reasons discussed herein, the court grants, in part, and denies, in part, the plaintiffs application and awards $16,323.41 in attorneys’ fees, expenses and costs for work performed in connection with this case.

FACTS

Complete findings of fact are contained in Taylor 1, which the court herein incorporates by reference. The additional evidence submitted by the parties, which the court finds dispositive, is as follows:

(1) The parties have stipulated that “[a]t no time prior to or during the settlement discussions was the subject of attorneys’ fees, costs, or expenses raised by either party.” Stipulation at ¶ 8.

(2) Lydia R. Hakken, counsel for the General Services Administration (“GSA”), filed a Declaration and therein states that “it was the understanding of GSA that the Settlement Agreement constituted the entire *1548 agreement between the parties and that it did not exclude attorneys’ fees.” Hakken’s Declaration at ¶ 5.

(3) Kenneth R. Pakula, counsel for the Environmental Pi-otection Agency (“EPA”), filed a Declaration and therein states that “[t]he subject of attorneys’ fees, costs, and expenses was not discussed prior to, or during, settlement discussions. At no point in time did counsel for [the plaintiff] indicate that they would seek to be reimbursed for attorneys’ fees, costs or expenses.” Pakula’s Declaration at ¶ 4.

(4) The parties have stipulated that the plaintiffs “first request for reimbursement of its attorneys’ fees ... was made in its application for Fees and Other Expenses Under the Equal Access to Justice Act. Prior to this application, [the plaintiff] had not requested reimbursement of its attorneys’ fees.” Stipulation at ¶ 9.

(5) The parties also have stipulated that “counsel for [the plaintiff] drafted the Settlement Agreement, provided draft copies to counsel for GSA and EPA for comment, and coordinated the Settlement Agreement between the parties.” Id. at ¶ 6.

(6) In an affidavit, counsel for the plaintiff (Karl Dix) explains his reasons for excluding a request for attorneys’ fees, expenses and costs in the complaint and for failing to discuss the same during settlement negotiations. He states that he thought such a request in the complaint “would be premature,” since such a request “could only be ruled upon by the Court after final adjudication of the matter.” Dix’s Aff. at ¶2. He further explains as follows:

I remember that we were rushed to finalize the settlement since the scheduled preliminary injunction hearing was driving the resolution of this matter. Accordingly, I never mentioned the recovery of attorneys’ fees during the settlement of this matter since [the plaintiff] did not request reimbursement of attorneys’ fees in its Complaint and I viewed an Equal Access to Justice Act fee application as a proceeding separate and apart from the underlying litigation which would be heard and resolved after the litigation had been concluded as required by statute. Raising and negotiating the fee application issue, I feared, would expand the scope of the negotiations and, potentially, fatally undermine the resolution of this matter since resolution would be delayed beyond the hearing date.

Id. at ¶ 4.

(7)The settlement agreement executed between the parties includes the following clause: “This Settlement Agreement contains the entire agreement and understanding between [the plaintiff] and Defendants] relating to the subject matter contained herein, and it may not be altered, amended, or modified in any respect or particular whatsoever except by writing duly.... ”

DISCUSSION

I. Special Circumstances

In determining the plaintiffs right to attorneys’ fees, expenses and costs under the EAJA, the only issue remaining is whether the United States has met its burden of showing that “special circumstances” make an award under the EAJA inappropriate in this ease. 28 U.S.C. § 2412(d)(1)(B). The court finds that the United States has failed to sustain its burden.

The “special circumstances” exception under the EAJA functions as “ ‘safety valve’ ” and serves at least two purposes. National Treasury Employees Union, 735 F.2d at 1278 (citing 1980 U.S.Code Cong. & Ad.News at 4990). First, the exception “ ‘help[s] insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts.’” Id. (brackets supplied). Second, “ ‘[i]t ... gives the court discretion to deny awards where equitable considerations dictate an award should not be made.’ ” Id.

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919 F. Supp. 1545, 40 Cont. Cas. Fed. 76,929, 1996 U.S. Dist. LEXIS 3323, 1996 WL 125646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taylor-group-inc-v-johnson-almd-1996.