Showing posts with label EAJA. Show all posts
Showing posts with label EAJA. Show all posts
Thursday, June 30, 2011
Friday, April 29, 2011
Federal Circuit, Wagner v. Shinseki, No. 2010-7113, Fees on Fees
Excerpt from decision below:
"As the Supreme Court made clear in Jean, “[t]he EAJA applies to a wide range of awards in which the cost of litigating fee disputes would equal or exceed the cost of litigating the merits of the claim.” 496 U.S. at 163-64 (footnote omitted). Thus, regardless of whether Wagner could recoup, through his supplemental fee
WAGNER v. DVA 12
application, an amount that is nearly equal to the amount that he was denied on his original fee application, he is entitled to be compensated for all hours reasonably ex-pended successfully defending his original fee request. See id. at 164-65 (“The Government’s general interest in protecting the federal fisc is subordinate to the specific statutory goals of encouraging private parties to vindicate their rights and curbing excessive regulation and the unreasonable exercise of Government authority.” (foot-notes omitted) (citations and internal quotation marks omitted))."
==========================
United States Court of Appeals for the Federal Circuit
__________________________
PHILLIP E. WAGNER,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, SECRETARY OF VETERANS AFFAIRS,
Respondent-Appellee.
__________________________
2010-7113
__________________________
Appeal from the United States Court of Appeals for Veterans Claims in case no. 08-1702, Judge Alan G. Lance, Sr.
______________________
Decided: April 29, 2011
_______________________
KENNETH M. CARPENTER, Carpenter Chartered, of Topeka, Kansas, argued for claimant-appellant. On the brief was THEODORE C. JARVI, Law Offices of Theodore C. Jarvi, of Tempe, Arizona.
DANIEL RABINOWITZ, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent-appellee. With him on the brief were TONY WEST, Assis-tant Attorney General, JEANNE E. DAVIDSON, Director,
WAGNER v. DVA 2
and BRIAN M. SIMKIN, Assistant Director. Of counsel on the brief were MICHAEL J. TIMINSKI, Deputy Assistant General Counsel, and KRISTIANA BRUGGER, Attorney, United States Department of Veterans Affairs, of Wash-ington, DC.
__________________________
Before BRYSON, MAYER, and DYK, Circuit Judges.
MAYER, Circuit Judge.
Phillip E. Wagner appeals from a final judgment of the United States Court of Appeals for Veterans Claims (“Veterans Court”) denying his application for supplemen-tal attorney fees incurred in the defense of his initial application for attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. See Wagner v. Shinseki, No. 08-1702, 2010 U.S. App. Vet. Claims LEXIS 713 (Vet. App. Apr. 21, 2010). We reverse and remand.
BACKGROUND
Wagner served in the United States Navy from July 1962 to July 1979 and from March 1982 to March 1988. He appealed to the Veterans Court after the Board of Veterans’ Appeals (“board”) denied his claim for service-connected benefits for a thyroid disorder. Pursuant to a joint motion of the parties, the Veterans Court vacated the board’s decision and remanded the case to the De-partment of Veterans Affairs for reconsideration.
Wagner subsequently filed an application for attorney fees under the EAJA, arguing that the remand made him a “prevailing party” for purposes of establishing entitle-ment to an EAJA award. He sought fees of $11,710.57 for 70.3 hours of attorney work. The Secretary of Veterans Affairs conceded that Wagner was a prevailing party for purposes of the EAJA, but challenged the amount of the
WAGNER v. DVA 3
fee request based on “the reasonableness of the requested fees.” See Wagner v. Shinseki, No. 08-1702, 2009 U.S. App. Vet. Claims LEXIS 1791, at *1 (Vet. App. Oct. 14, 2009) (citations and internal quotation marks omitted). Specifically, the Secretary argued that (1) the fee for legal research should be reduced by 14.6 hours because Theodore C. Jarvi, Wagner’s attorney, was an experienced veterans’ law attorney, and should not have needed to conduct extensive research, (2) the fee for review of Wag-ner’s claim file should be reduced by 8.8 hours because Jarvi had already spent 7.7 hours reviewing the file, and (3) the fee for scanning the claims file and instructing staff on how to combine the files of the record before the agency (“RBA”) should be reduced by 4.0 hours since these tasks were purely clerical. Id. at *2-3. Wagner thereafter filed a response, defending his original fee application and requesting additional fees of $4,134.00 for time spent defending the fees that had been challenged by the Secretary.
On October 14, 2009, the Veterans Court granted Wagner an EAJA award of $8,601.80, which was an approximately 26.5 percent reduction from the $11,710.57 he had requested. Id. at *1-4. The court reduced Wag-ner’s requested fees for legal research by 8.5 hours, the fees sought for review of the claims file by 8.8 hours, and the fees sought for scanning the claims file and instruct-ing staff on how to combine files from the RBA by 1.5 hours. Of the 27.4 hours that had been challenged by the Secretary, the Veterans Court disallowed 18.8 hours. Id.
On October 26, 2009, Wagner filed a revised fee appli-cation, seeking $2,458.90 in supplemental fees for time expended defending his original EAJA fee request. Wag-ner did not seek compensation for time spent on argu-ments that were rejected by the Veterans Court when it made its original award. He argued, however, that he
WAGNER v. DVA 4
was partially successful in defending his original fee application, and that he should be compensated for the 10.87 hours he spent successfully responding to the Secretary’s challenges to his application as well as for the 4.0 hours he spent reviewing the Veterans Court’s decision and drafting the supplemental fee request.
On February 17, 2010, the Veterans Court, in a single judge decision, denied the application for supplemental fees. The court stated that it would “not reward [Wagner] for his efforts to defend his earlier application” since the court had “substantially reduced [Wagner’s] original EAJA application after concluding that much of the requested fees were unreasonable.” See Wagner v. Shin-seki, No. 08-1702, 2010 U.S. App. Vet. Claims LEXIS 197, at *3 (Vet. App. Feb. 17, 2010) (“Supplemental Fees Deci-sion”). The court asserted that “[i]t would be anomalous to reduce an [initial EAJA] award by some $3,000 and then award nearly that amount to the losing party simply for putting up a fight.” Id.
Wagner thereafter filed a motion seeking panel review of the decision denying him supplemental fees, but the Veterans Court denied this motion on April 21, 2010. Wagner then appealed to this court.
DISCUSSION
We have jurisdiction over appeals from the Veterans Court under 38 U.S.C. § 7292. Interpretation of the EAJA is a question of law, subject to de novo review.1 Kelly v. Nicholson, 463 F.3d 1349, 1352 (Fed. Cir. 2006).
1 In relevant part, the EAJA provides:
Except as otherwise specifically provided by stat-ute, a court shall award to a prevailing party other than the United States fees and other ex-
WAGNER v. DVA 5
penses, in addition to any costs awarded pursu-ant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that ac-tion, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A).
The primary purpose of the EAJA is to ensure that litigants “will not be deterred from seeking review of, or defending against, unjustified governmental action be-cause of the expense involved.” Scarborough v. Principi, 541 U.S. 401, 407 (2004) (citations and internal quotation marks omitted). The statute plays a particularly impor-tant role in the veterans’ adjudicatory system:
Removing [deterrents to seeking judicial review] is imperative in the veterans benefits context, which is intended to be uniquely pro-claimant, and in which veterans generally are not repre-sented by counsel before the [regional office] and the board. [The] EAJA is a vital complement to this system designed to aid veterans, because it helps to ensure that they will seek an appeal when the VA has failed in its duty to aid them or has otherwise erroneously denied them the bene-fits that they have earned.
Kelly, 463 F.3d at 1353 (citations and internal quotation marks omitted).
“[A]n award of fees incurred in every stage of litiga-tion is consistent with the legislative purpose of the EAJA
WAGNER v. DVA 6
. . . .” Fritz v. Principi, 264 F.3d 1372, 1377 (Fed. Cir. 2001). Thus, a prevailing party in a veterans case is entitled to an award of fees not only for hours devoted to the underlying merits litigation, but also for attorney time reasonably expended defending an initial EAJA applica-tion. Comm’r, Immigration & Naturalization Serv. v. Jean, 496 U.S. 154, 161-62 (1990) (“Jean”); Fritz, 264 F.3d at 1377. Fees awarded for the defense of an initial fee application are commonly referred to as “supplemental fees” or “fees on fees.”
Wagner contends that the Veterans Court misinter-preted 28 U.S.C. § 2412(d)(1)(A) when it denied, in full, his petition seeking supplemental fees. He notes that he was partially successful in defending against the Secretary’s challenge to his initial EAJA application, and argues that he should be awarded supplemental fees commensurate with the degree of success he achieved.
We agree. In Jean, the Supreme Court expressly rejected the argument that a claimant could be awarded supplemental fees only if the government’s challenge to an initial EAJA application was not substantially justi-fied. 496 U.S. at 158-62. The Court explained that “[a]ny given civil action can have numerous phases,” but that “the EAJA-like other fee-shifting statutes-favors treating a case as an inclusive whole, rather than as atomized line-items.” Id. at 161-62. Recognizing that “requiring courts to make a separate finding of ‘substan-tial justification’ regarding the Government’s opposition to fee requests would multiply litigation,” id. at 163, the Court concluded that only one “threshold” determination that the government’s position in the underlying merits litigation was not substantially justified is required, id. at 160. Accordingly, “a party who prevails in fee litigation under [the] EAJA may recover fees for legal services rendered during the fee litigation even if some of the
WAGNER v. DVA 7
2 The Court explained:
Because [Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)] requires the district court to consider the relationship between the amount of the fee awarded and the results obtained, fees for fee litigation should be excluded to the extent that the applicant ultimately fails to prevail in such litigation. For example, if the Government’s challenge to a requested rate for paralegal time resulted in the court’s recalculating and reducing the award for paralegal time from the requested time, then the applicant should not receive fees for the time spent defending the higher rate.
Jean, 496 U.S. at 163 n.10.
Government’s positions regarding the proper fee were ‘substantially justified,’ i.e., the district court need not make a second finding of no substantial justification before awarding fees for the fee contest itself.” Scarbor-ough, 541 U.S. at 419 n.6 (citing Jean, 496 U.S. at 160-62).
When calculating a supplemental fee award, a court is required to consider “the relationship between the amount of the fee awarded and the results obtained” through the initial EAJA application.2 Jean, 496 U.S. at 163 n.10. Thus, supplemental fees should be denied “to the extent” that a claimant’s defense of his original fee application proves unsuccessful. Id. Conversely, however, supplemental fees should be granted to the extent that a claimant successfully defends his original fee application. See Fritz, 264 F.3d at 1377 (emphasizing that a veteran is “entitled to attorney fees incurred throughout the litigation, including those incurred in preparation and defense of the fee application to the extent those fees are defensible” (footnote omitted)). To
WAGNER v. DVA 8
3 Although Hensley involved the award of fees un-der the Civil Rights Attorney’s Fees Act of 1976, 42 U.S.C. § 1988, the standards set forth for awarding attorney fees “are generally applicable in all cases in which Congress has authorized an award of fees to a ‘prevailing party.’” Hensley, 461 U.S. at 433 n.7. Furthermore, although Hensley involved an initial fee application, the fee guide-lines it provides are applicable to supplemental fee appli-cations as well. Jean, 496 U.S. at 161-63.
deny a litigant all supplemental fees simply because the defense of his original fee application was not wholly successful unjustifiably dilutes the value of the original EAJA fee award and is contrary to the fundamental objectives of the EAJA. See Orange Blossom Ltd. P’ship v. S. Cal. Sunbelt Developers, Inc., 608 F.3d 456, 463 (9th Cir. 2010) (explaining that “it would be inconsistent [with the purpose of fee-shifting statutes] to dilute a fees award by refusing to compensate attorneys for the time they reasonably spent in establishing their rightful claim to the fee” (citations and internal quotation marks omitted)); Prandini v. Nat’l Tea Co., 585 F.2d 47, 53 (3d Cir. 1978) (“If an attorney is required to expend time litigating his fee claim, yet may not be compensated for that time, the attorney’s effective rate for all the hours expended on the case will be correspondingly decreased.”); see also Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1305 (11th Cir. 1988) (“To paraphrase the acute observation of base-ball great Yogi Berra, a case ain’t over till it’s over. This means that . . . counsel are entitled to compensation until all benefits obtained by the litigation are in hand.”).
Courts should look to the framework established in Hensley, 461 U.S. at 435-39, when calculating an appro-priate supplemental fee award.3 See Jean, 496 U.S. at 161-63. In setting the fee, “the most critical factor is the degree of success obtained.” Hensley, 461 U.S. at 436.
WAGNER v. DVA 9
Thus, where a claimant “has achieved only partial or limited success,” a court “may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success.” Id. at 436-37. Because Hensley requires a court to calibrate the amount of attorney fees to the degree of success a claimant has achieved, it is generally appropriate to make an award of supplemental fees that is commensurate with the degree of success obtained on the original fee applica-tion. See, e.g., Schwarz v. Sec’y of Health & Human Servs., 73 F.3d 895, 909 (9th Cir. 1995) (affirming an award of 50 percent of the supplemental fees sought by a claimant where she obtained approximately 50 percent of the fees claimed in her initial fee application); Spellan v. Bd. of Educ., 69 F.3d 828, 829 (7th Cir. 1995) (emphasiz-ing that a claimant’s success on his original fee application “is a material consideration in adjudicating the amount of fees recoverable in litigating an attorneys’ fee award”); Thompson v. Gomez, 45 F.3d 1365, 1367-69 (9th Cir. 1995) (concluding that a district court properly awarded 87 percent of the supplemental fees requested where claimants received 87 percent of the fees sought in their original fee application); In re Burlington N., Inc. Emp’t Practices Litig., 832 F.2d 430, 433-36 (7th Cir. 1987) (concluding that the district court properly reduced a fees on fees award based upon the degree of success obtained in the original fee litigation); Harris v. McCarthy, 790 F.2d 753, 758-59 (9th Cir. 1986) (affirming a district court’s decision to award claimants 11.5 percent of their supplemental fee request since they had obtained only 11.5 percent of the fees requested in their original fee application); Institutionalized Juveniles v. Sec’y of Pub. Welfare, 758 F.2d 897, 924-25 (3d Cir. 1985) (concluding that the district court properly reduced fees on fees by 12.5 percent where claimants did not obtain complete success on their original fee application); Mercer v. Duke
WAGNER v. DVA 10
4 The Secretary challenged 27.4 of the hours claimed in Wagner’s initial EAJA application, and the Veterans Court disallowed 18.8, or approximately 68.6 percent, of the challenged hours. Wagner asserts that when he submitted his application for supplemental fees, he reduced the hours claimed proportionately to his degree of success in defending his original fee application. On remand, the Veterans Court will have the opportunity to consider whether the supplemental fees sought by Wagner accurately reflect attorney hours reasonably devoted to the successful defense of the original fee application. We think it inappropriate to establish a blanket rule regarding whether the recovery of supplemental fees should be in proportion to the success obtained on the original EAJA application or the success in defending the contested fees. The considerations discussed in this opinion, however, should be taken into account on re-mand.
Univ., 301 F. Supp. 2d 454, 469 (M.D.N.C. 2004) (reducing a request for supplemental fees by 20 percent because the initial fee request was reduced by 20 percent), aff’d, 401 F.3d 199 (4th Cir. 2005).
Here, Wagner was partially successful in defending against the government’s challenge to his initial fee application, and he is entitled to supplemental fees com-mensurate with the degree of success he achieved.4 While “the relative degree of success in litigating for merits fees should bear upon the size of the fees-on-fees award,” Thompson, 45 F.3d at 1368, there is no justification for denying a supplemental fee request in its entirety simply because the claimant’s initial fee application was not wholly successful.
To be sure, a court has broad discretion in awarding attorney fees, see Hensley, 461 U.S. at 437, and is not bound, in all cases, to make an award of supplemental fees that is proportionate to the degree of success obtained on the original EAJA application. A litigant is only
WAGNER v. DVA 11
entitled to “reasonable” attorney fees, 28 U.S.C. § 2412(d)(2)(A), and in fashioning a reasonable supple-mental fee award a court may properly discount any “[e]xorbitant” or “unfounded” fee applications. Jean, 496 U.S. at 163; see also Fritz, 264 F.3d at 1377 (emphasizing that a supplemental fee award can be reduced “to the extent that the applicant ultimately fails to prove justifi-cation for each item of fee claimed” or if the fee applica-tion is “procedurally defective”). On remand, the Veterans Court will have the opportunity to consider whether such factors warrant a reduction in Wagner’s supplemental fee award. If the court decides to discount Wagner’s supplemental fee request, however, it needs to provide a reasoned explanation as to why particular attorney hours should be excluded. See Hensley, 461 U.S. at 437 (explaining that a court must “provide a concise but clear explanation of its reasons for the fee award”); United States v. Eleven Vehicles, Their Equip. & Accesso-ries, 200 F.3d 203, 213 (3d Cir. 2000) (emphasizing that a trial court cannot deny supplemental fees without provid-ing an adequate explanation as to why such fees are “excessive, redundant [or] otherwise unnecessary” (cita-tions and internal quotation marks omitted)).
In denying Wagner’s application for supplemental fees, the Veterans Court stated that “[i]t would be anoma-lous to reduce an [initial EAJA] award by some $3,000 and then award nearly that amount to the losing party simply for putting up a fight.” Supplemental Fees Deci-sion, 2010 U.S. App. Vet. Claims LEXIS 197, at *3. We disagree. As the Supreme Court made clear in Jean, “[t]he EAJA applies to a wide range of awards in which the cost of litigating fee disputes would equal or exceed the cost of litigating the merits of the claim.” 496 U.S. at 163-64 (footnote omitted). Thus, regardless of whether Wagner could recoup, through his supplemental fee
WAGNER v. DVA 12
application, an amount that is nearly equal to the amount that he was denied on his original fee application, he is entitled to be compensated for all hours reasonably expended successfully defending his original fee request. See id. at 164-65 (“The Government’s general interest in protecting the federal fisc is subordinate to the specific statutory goals of encouraging private parties to vindicate their rights and curbing excessive regulation and the unreasonable exercise of Government authority.” (foot-notes omitted) (citations and internal quotation marks omitted)).
CONCLUSION
Accordingly, the judgment of the United States Court of Appeals for Veterans Claims is reversed and the case is remanded for further proceedings consistent with this opinion.
COSTS
Wagner shall have his costs.
REVERSED AND REMANDED
"As the Supreme Court made clear in Jean, “[t]he EAJA applies to a wide range of awards in which the cost of litigating fee disputes would equal or exceed the cost of litigating the merits of the claim.” 496 U.S. at 163-64 (footnote omitted). Thus, regardless of whether Wagner could recoup, through his supplemental fee
WAGNER v. DVA 12
application, an amount that is nearly equal to the amount that he was denied on his original fee application, he is entitled to be compensated for all hours reasonably ex-pended successfully defending his original fee request. See id. at 164-65 (“The Government’s general interest in protecting the federal fisc is subordinate to the specific statutory goals of encouraging private parties to vindicate their rights and curbing excessive regulation and the unreasonable exercise of Government authority.” (foot-notes omitted) (citations and internal quotation marks omitted))."
==========================
United States Court of Appeals for the Federal Circuit
__________________________
PHILLIP E. WAGNER,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, SECRETARY OF VETERANS AFFAIRS,
Respondent-Appellee.
__________________________
2010-7113
__________________________
Appeal from the United States Court of Appeals for Veterans Claims in case no. 08-1702, Judge Alan G. Lance, Sr.
______________________
Decided: April 29, 2011
_______________________
KENNETH M. CARPENTER, Carpenter Chartered, of Topeka, Kansas, argued for claimant-appellant. On the brief was THEODORE C. JARVI, Law Offices of Theodore C. Jarvi, of Tempe, Arizona.
DANIEL RABINOWITZ, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent-appellee. With him on the brief were TONY WEST, Assis-tant Attorney General, JEANNE E. DAVIDSON, Director,
WAGNER v. DVA 2
and BRIAN M. SIMKIN, Assistant Director. Of counsel on the brief were MICHAEL J. TIMINSKI, Deputy Assistant General Counsel, and KRISTIANA BRUGGER, Attorney, United States Department of Veterans Affairs, of Wash-ington, DC.
__________________________
Before BRYSON, MAYER, and DYK, Circuit Judges.
MAYER, Circuit Judge.
Phillip E. Wagner appeals from a final judgment of the United States Court of Appeals for Veterans Claims (“Veterans Court”) denying his application for supplemen-tal attorney fees incurred in the defense of his initial application for attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. See Wagner v. Shinseki, No. 08-1702, 2010 U.S. App. Vet. Claims LEXIS 713 (Vet. App. Apr. 21, 2010). We reverse and remand.
BACKGROUND
Wagner served in the United States Navy from July 1962 to July 1979 and from March 1982 to March 1988. He appealed to the Veterans Court after the Board of Veterans’ Appeals (“board”) denied his claim for service-connected benefits for a thyroid disorder. Pursuant to a joint motion of the parties, the Veterans Court vacated the board’s decision and remanded the case to the De-partment of Veterans Affairs for reconsideration.
Wagner subsequently filed an application for attorney fees under the EAJA, arguing that the remand made him a “prevailing party” for purposes of establishing entitle-ment to an EAJA award. He sought fees of $11,710.57 for 70.3 hours of attorney work. The Secretary of Veterans Affairs conceded that Wagner was a prevailing party for purposes of the EAJA, but challenged the amount of the
WAGNER v. DVA 3
fee request based on “the reasonableness of the requested fees.” See Wagner v. Shinseki, No. 08-1702, 2009 U.S. App. Vet. Claims LEXIS 1791, at *1 (Vet. App. Oct. 14, 2009) (citations and internal quotation marks omitted). Specifically, the Secretary argued that (1) the fee for legal research should be reduced by 14.6 hours because Theodore C. Jarvi, Wagner’s attorney, was an experienced veterans’ law attorney, and should not have needed to conduct extensive research, (2) the fee for review of Wag-ner’s claim file should be reduced by 8.8 hours because Jarvi had already spent 7.7 hours reviewing the file, and (3) the fee for scanning the claims file and instructing staff on how to combine the files of the record before the agency (“RBA”) should be reduced by 4.0 hours since these tasks were purely clerical. Id. at *2-3. Wagner thereafter filed a response, defending his original fee application and requesting additional fees of $4,134.00 for time spent defending the fees that had been challenged by the Secretary.
On October 14, 2009, the Veterans Court granted Wagner an EAJA award of $8,601.80, which was an approximately 26.5 percent reduction from the $11,710.57 he had requested. Id. at *1-4. The court reduced Wag-ner’s requested fees for legal research by 8.5 hours, the fees sought for review of the claims file by 8.8 hours, and the fees sought for scanning the claims file and instruct-ing staff on how to combine files from the RBA by 1.5 hours. Of the 27.4 hours that had been challenged by the Secretary, the Veterans Court disallowed 18.8 hours. Id.
On October 26, 2009, Wagner filed a revised fee appli-cation, seeking $2,458.90 in supplemental fees for time expended defending his original EAJA fee request. Wag-ner did not seek compensation for time spent on argu-ments that were rejected by the Veterans Court when it made its original award. He argued, however, that he
WAGNER v. DVA 4
was partially successful in defending his original fee application, and that he should be compensated for the 10.87 hours he spent successfully responding to the Secretary’s challenges to his application as well as for the 4.0 hours he spent reviewing the Veterans Court’s decision and drafting the supplemental fee request.
On February 17, 2010, the Veterans Court, in a single judge decision, denied the application for supplemental fees. The court stated that it would “not reward [Wagner] for his efforts to defend his earlier application” since the court had “substantially reduced [Wagner’s] original EAJA application after concluding that much of the requested fees were unreasonable.” See Wagner v. Shin-seki, No. 08-1702, 2010 U.S. App. Vet. Claims LEXIS 197, at *3 (Vet. App. Feb. 17, 2010) (“Supplemental Fees Deci-sion”). The court asserted that “[i]t would be anomalous to reduce an [initial EAJA] award by some $3,000 and then award nearly that amount to the losing party simply for putting up a fight.” Id.
Wagner thereafter filed a motion seeking panel review of the decision denying him supplemental fees, but the Veterans Court denied this motion on April 21, 2010. Wagner then appealed to this court.
DISCUSSION
We have jurisdiction over appeals from the Veterans Court under 38 U.S.C. § 7292. Interpretation of the EAJA is a question of law, subject to de novo review.1 Kelly v. Nicholson, 463 F.3d 1349, 1352 (Fed. Cir. 2006).
1 In relevant part, the EAJA provides:
Except as otherwise specifically provided by stat-ute, a court shall award to a prevailing party other than the United States fees and other ex-
WAGNER v. DVA 5
penses, in addition to any costs awarded pursu-ant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that ac-tion, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A).
The primary purpose of the EAJA is to ensure that litigants “will not be deterred from seeking review of, or defending against, unjustified governmental action be-cause of the expense involved.” Scarborough v. Principi, 541 U.S. 401, 407 (2004) (citations and internal quotation marks omitted). The statute plays a particularly impor-tant role in the veterans’ adjudicatory system:
Removing [deterrents to seeking judicial review] is imperative in the veterans benefits context, which is intended to be uniquely pro-claimant, and in which veterans generally are not repre-sented by counsel before the [regional office] and the board. [The] EAJA is a vital complement to this system designed to aid veterans, because it helps to ensure that they will seek an appeal when the VA has failed in its duty to aid them or has otherwise erroneously denied them the bene-fits that they have earned.
Kelly, 463 F.3d at 1353 (citations and internal quotation marks omitted).
“[A]n award of fees incurred in every stage of litiga-tion is consistent with the legislative purpose of the EAJA
WAGNER v. DVA 6
. . . .” Fritz v. Principi, 264 F.3d 1372, 1377 (Fed. Cir. 2001). Thus, a prevailing party in a veterans case is entitled to an award of fees not only for hours devoted to the underlying merits litigation, but also for attorney time reasonably expended defending an initial EAJA applica-tion. Comm’r, Immigration & Naturalization Serv. v. Jean, 496 U.S. 154, 161-62 (1990) (“Jean”); Fritz, 264 F.3d at 1377. Fees awarded for the defense of an initial fee application are commonly referred to as “supplemental fees” or “fees on fees.”
Wagner contends that the Veterans Court misinter-preted 28 U.S.C. § 2412(d)(1)(A) when it denied, in full, his petition seeking supplemental fees. He notes that he was partially successful in defending against the Secretary’s challenge to his initial EAJA application, and argues that he should be awarded supplemental fees commensurate with the degree of success he achieved.
We agree. In Jean, the Supreme Court expressly rejected the argument that a claimant could be awarded supplemental fees only if the government’s challenge to an initial EAJA application was not substantially justi-fied. 496 U.S. at 158-62. The Court explained that “[a]ny given civil action can have numerous phases,” but that “the EAJA-like other fee-shifting statutes-favors treating a case as an inclusive whole, rather than as atomized line-items.” Id. at 161-62. Recognizing that “requiring courts to make a separate finding of ‘substan-tial justification’ regarding the Government’s opposition to fee requests would multiply litigation,” id. at 163, the Court concluded that only one “threshold” determination that the government’s position in the underlying merits litigation was not substantially justified is required, id. at 160. Accordingly, “a party who prevails in fee litigation under [the] EAJA may recover fees for legal services rendered during the fee litigation even if some of the
WAGNER v. DVA 7
2 The Court explained:
Because [Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)] requires the district court to consider the relationship between the amount of the fee awarded and the results obtained, fees for fee litigation should be excluded to the extent that the applicant ultimately fails to prevail in such litigation. For example, if the Government’s challenge to a requested rate for paralegal time resulted in the court’s recalculating and reducing the award for paralegal time from the requested time, then the applicant should not receive fees for the time spent defending the higher rate.
Jean, 496 U.S. at 163 n.10.
Government’s positions regarding the proper fee were ‘substantially justified,’ i.e., the district court need not make a second finding of no substantial justification before awarding fees for the fee contest itself.” Scarbor-ough, 541 U.S. at 419 n.6 (citing Jean, 496 U.S. at 160-62).
When calculating a supplemental fee award, a court is required to consider “the relationship between the amount of the fee awarded and the results obtained” through the initial EAJA application.2 Jean, 496 U.S. at 163 n.10. Thus, supplemental fees should be denied “to the extent” that a claimant’s defense of his original fee application proves unsuccessful. Id. Conversely, however, supplemental fees should be granted to the extent that a claimant successfully defends his original fee application. See Fritz, 264 F.3d at 1377 (emphasizing that a veteran is “entitled to attorney fees incurred throughout the litigation, including those incurred in preparation and defense of the fee application to the extent those fees are defensible” (footnote omitted)). To
WAGNER v. DVA 8
3 Although Hensley involved the award of fees un-der the Civil Rights Attorney’s Fees Act of 1976, 42 U.S.C. § 1988, the standards set forth for awarding attorney fees “are generally applicable in all cases in which Congress has authorized an award of fees to a ‘prevailing party.’” Hensley, 461 U.S. at 433 n.7. Furthermore, although Hensley involved an initial fee application, the fee guide-lines it provides are applicable to supplemental fee appli-cations as well. Jean, 496 U.S. at 161-63.
deny a litigant all supplemental fees simply because the defense of his original fee application was not wholly successful unjustifiably dilutes the value of the original EAJA fee award and is contrary to the fundamental objectives of the EAJA. See Orange Blossom Ltd. P’ship v. S. Cal. Sunbelt Developers, Inc., 608 F.3d 456, 463 (9th Cir. 2010) (explaining that “it would be inconsistent [with the purpose of fee-shifting statutes] to dilute a fees award by refusing to compensate attorneys for the time they reasonably spent in establishing their rightful claim to the fee” (citations and internal quotation marks omitted)); Prandini v. Nat’l Tea Co., 585 F.2d 47, 53 (3d Cir. 1978) (“If an attorney is required to expend time litigating his fee claim, yet may not be compensated for that time, the attorney’s effective rate for all the hours expended on the case will be correspondingly decreased.”); see also Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1305 (11th Cir. 1988) (“To paraphrase the acute observation of base-ball great Yogi Berra, a case ain’t over till it’s over. This means that . . . counsel are entitled to compensation until all benefits obtained by the litigation are in hand.”).
Courts should look to the framework established in Hensley, 461 U.S. at 435-39, when calculating an appro-priate supplemental fee award.3 See Jean, 496 U.S. at 161-63. In setting the fee, “the most critical factor is the degree of success obtained.” Hensley, 461 U.S. at 436.
WAGNER v. DVA 9
Thus, where a claimant “has achieved only partial or limited success,” a court “may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success.” Id. at 436-37. Because Hensley requires a court to calibrate the amount of attorney fees to the degree of success a claimant has achieved, it is generally appropriate to make an award of supplemental fees that is commensurate with the degree of success obtained on the original fee applica-tion. See, e.g., Schwarz v. Sec’y of Health & Human Servs., 73 F.3d 895, 909 (9th Cir. 1995) (affirming an award of 50 percent of the supplemental fees sought by a claimant where she obtained approximately 50 percent of the fees claimed in her initial fee application); Spellan v. Bd. of Educ., 69 F.3d 828, 829 (7th Cir. 1995) (emphasiz-ing that a claimant’s success on his original fee application “is a material consideration in adjudicating the amount of fees recoverable in litigating an attorneys’ fee award”); Thompson v. Gomez, 45 F.3d 1365, 1367-69 (9th Cir. 1995) (concluding that a district court properly awarded 87 percent of the supplemental fees requested where claimants received 87 percent of the fees sought in their original fee application); In re Burlington N., Inc. Emp’t Practices Litig., 832 F.2d 430, 433-36 (7th Cir. 1987) (concluding that the district court properly reduced a fees on fees award based upon the degree of success obtained in the original fee litigation); Harris v. McCarthy, 790 F.2d 753, 758-59 (9th Cir. 1986) (affirming a district court’s decision to award claimants 11.5 percent of their supplemental fee request since they had obtained only 11.5 percent of the fees requested in their original fee application); Institutionalized Juveniles v. Sec’y of Pub. Welfare, 758 F.2d 897, 924-25 (3d Cir. 1985) (concluding that the district court properly reduced fees on fees by 12.5 percent where claimants did not obtain complete success on their original fee application); Mercer v. Duke
WAGNER v. DVA 10
4 The Secretary challenged 27.4 of the hours claimed in Wagner’s initial EAJA application, and the Veterans Court disallowed 18.8, or approximately 68.6 percent, of the challenged hours. Wagner asserts that when he submitted his application for supplemental fees, he reduced the hours claimed proportionately to his degree of success in defending his original fee application. On remand, the Veterans Court will have the opportunity to consider whether the supplemental fees sought by Wagner accurately reflect attorney hours reasonably devoted to the successful defense of the original fee application. We think it inappropriate to establish a blanket rule regarding whether the recovery of supplemental fees should be in proportion to the success obtained on the original EAJA application or the success in defending the contested fees. The considerations discussed in this opinion, however, should be taken into account on re-mand.
Univ., 301 F. Supp. 2d 454, 469 (M.D.N.C. 2004) (reducing a request for supplemental fees by 20 percent because the initial fee request was reduced by 20 percent), aff’d, 401 F.3d 199 (4th Cir. 2005).
Here, Wagner was partially successful in defending against the government’s challenge to his initial fee application, and he is entitled to supplemental fees com-mensurate with the degree of success he achieved.4 While “the relative degree of success in litigating for merits fees should bear upon the size of the fees-on-fees award,” Thompson, 45 F.3d at 1368, there is no justification for denying a supplemental fee request in its entirety simply because the claimant’s initial fee application was not wholly successful.
To be sure, a court has broad discretion in awarding attorney fees, see Hensley, 461 U.S. at 437, and is not bound, in all cases, to make an award of supplemental fees that is proportionate to the degree of success obtained on the original EAJA application. A litigant is only
WAGNER v. DVA 11
entitled to “reasonable” attorney fees, 28 U.S.C. § 2412(d)(2)(A), and in fashioning a reasonable supple-mental fee award a court may properly discount any “[e]xorbitant” or “unfounded” fee applications. Jean, 496 U.S. at 163; see also Fritz, 264 F.3d at 1377 (emphasizing that a supplemental fee award can be reduced “to the extent that the applicant ultimately fails to prove justifi-cation for each item of fee claimed” or if the fee applica-tion is “procedurally defective”). On remand, the Veterans Court will have the opportunity to consider whether such factors warrant a reduction in Wagner’s supplemental fee award. If the court decides to discount Wagner’s supplemental fee request, however, it needs to provide a reasoned explanation as to why particular attorney hours should be excluded. See Hensley, 461 U.S. at 437 (explaining that a court must “provide a concise but clear explanation of its reasons for the fee award”); United States v. Eleven Vehicles, Their Equip. & Accesso-ries, 200 F.3d 203, 213 (3d Cir. 2000) (emphasizing that a trial court cannot deny supplemental fees without provid-ing an adequate explanation as to why such fees are “excessive, redundant [or] otherwise unnecessary” (cita-tions and internal quotation marks omitted)).
In denying Wagner’s application for supplemental fees, the Veterans Court stated that “[i]t would be anoma-lous to reduce an [initial EAJA] award by some $3,000 and then award nearly that amount to the losing party simply for putting up a fight.” Supplemental Fees Deci-sion, 2010 U.S. App. Vet. Claims LEXIS 197, at *3. We disagree. As the Supreme Court made clear in Jean, “[t]he EAJA applies to a wide range of awards in which the cost of litigating fee disputes would equal or exceed the cost of litigating the merits of the claim.” 496 U.S. at 163-64 (footnote omitted). Thus, regardless of whether Wagner could recoup, through his supplemental fee
WAGNER v. DVA 12
application, an amount that is nearly equal to the amount that he was denied on his original fee application, he is entitled to be compensated for all hours reasonably expended successfully defending his original fee request. See id. at 164-65 (“The Government’s general interest in protecting the federal fisc is subordinate to the specific statutory goals of encouraging private parties to vindicate their rights and curbing excessive regulation and the unreasonable exercise of Government authority.” (foot-notes omitted) (citations and internal quotation marks omitted)).
CONCLUSION
Accordingly, the judgment of the United States Court of Appeals for Veterans Claims is reversed and the case is remanded for further proceedings consistent with this opinion.
COSTS
Wagner shall have his costs.
REVERSED AND REMANDED
Monday, April 13, 2009
EAJA, Administrative error verses judicial economy, Eady v. Shinseki, No. 2008-7121
NOTE: This disposition is nonprecedential.
EAJA, however, requires a party to prevail in order to receive attorney fees, and the validity of the government’s position is irrelevant to the question whether a party has prevailed.
++++++++++++++++++++++++++++++++++++
remands from a federal court to an administrative agency can, in some circumstances, constitute the requisite relief on the merits. “[W]here the plaintiff secures a remand requiring further agency proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party . . . without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court.” Former Employees of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003). Not every court-to-agency remand, however, confers prevailing party status. In order for the party to be considered “prevailing,” the remand order must have been “either explicitly or implicitly predicated on administrative error.” Davis v. Nicholson, 475 F.3d 1360, 1364 (Fed. Cir. 2007).
++++++++++++++++++++++++++++++++++++
Kelly v. Nicholson, 463 F.3d 1349 (Fed. Cir. 2006). In that case, the veteran filed a claim for service connection. Although medical records contained two diagnoses, olivopontocerebellar atrophy (“OPCA”) and ataxia, the Board considered only the OPCA diagnosis, and on the basis of that diagnosis alone concluded that his claim was not well grounded. The Veterans Court remanded the case for consideration of his ataxia-based theory. The veteran then filed a request for attorney fees. Although the Veterans Court denied the request, we reversed, holding that the remand order was predicated on agency error because the Board had “fail[ed] to consider all evidence and material of record before deciding a material issue on the merits.” Id. at 1354 n.***; see also id. at 1353.
++++++++++++++++++++++++++++++++++++
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-7121
LORENZA EADY,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, Secretary of Veterans Affairs,
Respondent-Appellee.
Francis M. Jackson, Jackson & MacNichol, of Portland, Maine, for claimant-appellant.
Phyllis Jo Baunach, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for respondent-appellee. With her on the brief were Jeanne E. Davidson, Director, and Martin F. Hockey, Jr., Assistant Director. Of counsel on the brief were Michael J. Timinski, Deputy Assistant General Counsel, and Martin J. Sendek, Attorney, Office of the General Counsel, United States Department of Veterans Affairs, of Washington, DC.
Appealed from: United States Court of Appeals for Veterans Claims
Judge Mary J. Schoelen
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-7121
LORENZA EADY,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, Secretary of Veterans Affairs,
Respondent-Appellee.
Appeal from the United States Court of Appeals for Veterans Claims
in 05-0024, Judge Mary J. Schoelen.
___________________________
DECIDED: April 13, 2009
___________________________
Before BRYSON, MOORE, Circuit Judges, and CUDAHY, Senior Circuit Judge. ∗
PER CURIAM.
DECISION
Lorenza Eady appeals from a decision of the Court of Appeals for Veterans Claims denying his request for attorney fees on the ground that he failed to establish that he was a prevailing party under the Equal Access to Justice Act. We affirm.
∗ The Honorable Richard D. Cudahy, Senior Circuit Judge, United States Court of Appeals for the Seventh Circuit, sitting by designation.
BACKGROUND
Mr. Eady served on active duty in the U.S. Army from September 1964 to October 1975. In November 1975, Mr. Eady filed a claim with the Department of Veterans Affairs (“DVA”) seeking disability compensation for a psychiatric condition. The DVA regional office granted Mr. Eady service connection for anxiety neurosis and assigned him a disability rating of 30%. Mr. Eady challenged that rating on the ground that he was “not employable” and was therefore entitled to a 100% disability rating. In April 1982, the Board of Veterans’ Appeals increased Mr. Eady’s disability rating to 50%, but it did not address the question whether Mr. Eady was entitled to total disability based on individual unemployability (“TDIU”). In February 1993, the regional office awarded Mr. Eady a 100% disability rating for post-traumatic stress disorder, effective as of January 27, 1989.
In May 1993, Mr. Eady filed a Notice of Disagreement alleging clear and unmistakable error (“CUE”) in the February 1993 decision that awarded him a 100% disability rating as of January 27, 1989. Mr. Eady contended that he had been 100% disabled since 1975 and that the 100% rating should have been made retroactive to that date.
The Board of Veterans’ Appeals ruled that there was no CUE in the February 1993 rating, and the Court of Appeals for Veterans Claims (“the Veterans Court”) affirmed. Mr. Eady appealed to this court, but we dismissed the appeal after the parties entered into a settlement agreement. The settlement agreement required the DVA to adjudicate whether Mr. Eady was entitled to TDIU based on any formal or informal claim filed for any period prior to January 27, 1989. In May 2004, the regional office denied
2008-7121 2
Mr. Eady’s claim for an earlier effective TDIU date on the ground that the Board had considered, but rejected, Mr. Eady’s assertion of unemployability in a July 1988 decision denying him an increased disability rating.
Mr. Eady then filed two separate actions with the Board: (1) a Notice of Disagreement with the May 2004 decision by the regional office, in which Mr. Eady contended that neither the Board nor the regional office had previously addressed his informal claims for TDIU, and (2) a motion for revision of the Board’s April 1982 decision that awarded Mr. Eady a disability rating of 50%, on the ground that the decision was the product of CUE because the Board had improperly applied 38 C.F.R. § 4.16, the DVA regulation pertaining to TDIU. The Board issued a decision that addressed both actions on September 23, 2004. With respect to the CUE claim, the Board determined that there was no CUE in the Board’s April 1982 decision. As for Mr. Eady’s notice of disagreement with the regional office’s May 2004 decision, the Board found that the regional office had not issued a statement of the case on the issue of whether Mr. Eady was entitled to an earlier effective date for a grant of TDIU. The Board therefore remanded for a statement of the case on that issue.
Mr. Eady took an appeal to the Veterans Court. On June 27, 2007, the Veterans Court vacated the Board’s decision denying Mr. Eady’s CUE claim because it found that the two claims that were before the Board were “inextricably intertwined”:
If the appellant prevails on either claim, he is entitled to an earlier effective date for the award of an increased rating for his service-connected anxiety condition. . . . [The] CUE claim relates to the same issues currently pending before [the DVA] in the non-CUE proceeding resulting from the settlement agreement, and . . . decisions in the non-CUE proceedings may render the claim of CUE moot. 2008-7121 3
The Veterans Court therefore concluded that it was “erroneous” for the Board to have issued a final decision on Mr. Eady’s CUE claim while remanding the TDIU claim. Accordingly, the court remanded the case to the Board to reconcile the inextricably intertwined proceedings. Eady v. Nicholson, No. 05-0024 (Vet. App. June 27, 2007).
Shortly after the remand order, Mr. Eady filed an application with the Veterans Court for attorney fees and expenses pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d)(1)(A). The Veterans Court concluded that Mr. Eady was not a “prevailing party” under EAJA, and therefore denied his application for fees and other expenses. Eady v. Peake, No. 05-0024(E) (Vet. App. May 19, 2008). Mr. Eady then petitioned for review by this court.
DISCUSSION
With certain exceptions, EAJA provides that a “prevailing party” in a civil action brought by or against the United States is entitled to recover attorney fees and costs unless the government’s position was substantially justified. 28 U.S.C. § 2412(d)(1)(A). A party is considered to be a “prevailing party” if he received “at least some relief on the merits of his claim,” resulting in a “material alteration of the legal relationship of the parties.” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 603, 604 (2001); see Brickwood Contractors, Inc. v. United States, 288 F.3d 1371, 1379 (Fed. Cir. 2002) (applying Buckhannon to EAJA).
Although remands by a court of appeals to a district court typically do not confer prevailing party status, remands from a federal court to an administrative agency can, in some circumstances, constitute the requisite relief on the merits. “[W]here the plaintiff secures a remand requiring further agency proceedings because of alleged error by the
2008-7121 4
agency, the plaintiff qualifies as a prevailing party . . . without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court.” Former Employees of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003). Not every court-to-agency remand, however, confers prevailing party status. In order for the party to be considered “prevailing,” the remand order must have been “either explicitly or implicitly predicated on administrative error.” Davis v. Nicholson, 475 F.3d 1360, 1364 (Fed. Cir. 2007). The question in this case is therefore whether the Veterans Court’s remand order on June 27, 2007, was predicated on agency error.
We addressed that question in Gurley v. Peake, 528 F.3d 1322 (Fed. Cir. 2008). In that case, Mr. Gurley, a veteran, appealed to the Board seeking an increase in his disability rating for a knee injury. Mr. Gurley also claimed entitlement to service connection for a psychiatric disorder stemming from that injury, as well as entitlement to a disability rating based on TDIU. The Board issued a decision increasing the veteran’s disability rating for his knee injury but remanded both the psychiatric disorder claim and the TDIU claim to the regional office. Mr. Gurley filed an appeal in which he argued that the Board should not have separately addressed the knee injury claim while remanding the other related matters. The parties then filed a joint motion for remand, which the Veterans Court granted and incorporated by reference. The motion stated:
The parties agree that remand is warranted to comply with the Court's holding in Harris v. Derwinski, 1 Vet. App. 180 (1991). Where the facts underlying separate claims are “intimately connected”, the interests of judicial economy and avoidance of piecemeal litigation require that the claims be adjudicated together. Smith v. Gober, 236 F.3d 1370, 1373 (Fed. Cir. 2001). The Court has held that where a decision on one issue would have a “significant impact” upon another, and that impact in turn “could render any review by this Court of the decision [on the other claim]
2008-7121 5
meaningless and a waste of judicial resources,” the two claims are inextricably intertwined. Harris v. Derwinski, 1 Vet. App. 180, 183 (1991).
Gurley, 528 F.3d at 1325. Following the remand order, Mr. Gurley filed an EAJA application for attorney fees, costs, and expenses. The Veterans Court concluded that Mr. Gurley was not a prevailing party entitled to fees under EAJA because the remand order was not predicated on agency error. We affirmed, explaining that the “‘sole basis’ for the remand was judicial economy rather than administrative error.” Id. at 1328.
Mr. Eady’s case is controlled by the Gurley decision. The Veterans Court based its remand order on its conclusion that the CUE and TDIU claims, like the claims at issue in Gurley, were “inextricably intertwined” so that a decision on one claim could render a decision on the other claim moot. Furthermore, the Veterans Court expressly cited the Gurley case for the proposition that a remand would “serve[] the interest of judicial economy,” and it explained that it took no position on the merits of Mr. Eady’s CUE arguments or the substance of the Board’s decision. We therefore agree with the Veterans Court that the sole basis for the underlying remand order was judicial economy, and not agency error.
Mr. Eady contends that because the Veterans Court characterized the Board’s decision as “erroneous,” the court’s remand order was necessarily predicated on the recognition of agency error. The use of the word “error,” however, is not talismanic. The basis for the Veterans Court’s remand order was its finding that the two claims before the Board were inextricably intertwined and that addressing the two matters separately would frustrate the interest of judicial economy. That is precisely the rationale that was held not to constitute a finding of administrative error in Gurley, and it would be incongruous to reach a contrary conclusion in this case. Gurley stands for the
2008-7121 6
proposition that a remand order based on the interest of judicial economy is not a remand predicated on agency error, and that proposition applies here, notwithstanding the Veterans Court’s use of the word “erroneous.”
Mr. Eady attempts to distinguish Gurley on the ground that in Gurley, the DVA agreed to a joint remand, whereas in this case, the DVA opposed remand. It is true that a defendant’s voluntary change in conduct is insufficient to confer prevailing party status on a plaintiff. See Buckhannon, 532 U.S. at 601. However, our conclusion in Gurley was not based on the fact that the parties had agreed to a joint remand, but rather flowed from the fact that the remand was intended to promote judicial economy by ensuring that related claims would be adjudicated together. The remand in this case was predicated on that same interest in judicial economy; for that reason, Mr. Eady does not enjoy prevailing party status. The fact that the DVA did not support the remand order does not alter that conclusion.
In support of his contention that the Veterans Court’s remand order was predicated on agency error, Mr. Eady cites our decision in Kelly v. Nicholson, 463 F.3d 1349 (Fed. Cir. 2006). In that case, the veteran filed a claim for service connection. Although medical records contained two diagnoses, olivopontocerebellar atrophy (“OPCA”) and ataxia, the Board considered only the OPCA diagnosis, and on the basis of that diagnosis alone concluded that his claim was not well grounded. The Veterans Court remanded the case for consideration of his ataxia-based theory. The veteran then filed a request for attorney fees. Although the Veterans Court denied the request, we reversed, holding that the remand order was predicated on agency error because
2008-7121 7
the Board had “fail[ed] to consider all evidence and material of record before deciding a material issue on the merits.” Id. at 1354 n.***; see also id. at 1353.
In this case, the Veterans Court did not find that the Board erroneously rejected Mr. Eady’s claims on the merits, either by ignoring pertinent evidence or committing other legal error. Rather, the court ruled that, in order to serve the interest of judicial efficiency, the Board should have addressed both of Mr. Eady’s claims at the same time because a decision on one claim could render the other claim moot. The court stated that it “takes no position on the merits of the appellant’s CUE arguments, [or] the substance of the Board decision.”
To be sure, after concluding that a remand was appropriate to address both of the related claims in the same proceeding, the Veterans Court commented on what it saw as the “unfortunate” procedural history of Mr. Eady’s case:
When the RO undertook the review pursuant to the settlement agreement, it concluded that it was powerless to address the merits of the appellant's argument because granting the relief sought would entail overturning a decision of the Board based upon the same facts that were before the Board. However, in the decision on appeal, the Board found that, assuming that the appellant raised a TDIU claim prior to its April 1982 decision, such a claim would not have been before the Board, but would have remained pending before the RO. The two seemingly contrary decisions leave the appellant without a forum for [the DVA] to address his TDIU arguments. Such a result cannot be correct. . . . On remand, the Board and the Secretary should do everything in their power to straighten out the procedural quagmire that this case has become so that the Court's next review of this case, if necessary, can be on the merits of the appellant's arguments.
Those comments did not reflect disagreement with the merits of the Board’s ruling on the CUE claim. Rather, the problem that the Veterans Court characterized as a “quagmire” was the procedural problem that prevented Mr. Eady’s TDIU claim from being heard in the first instance.
2008-7121 8
2008-7121 9
As in Gurley, the court’s remand order was predicated solely on an interest in judicial economy. Its remand order was not based on the “unfortunate” procedural circumstances that led to Mr. Eady’s appeal. The court addressed those circumstances in order to clarify that the DVA should take steps to ensure that Mr. Eady gets a chance to be heard on the merits of his TDIU claim. But the sole issue that was before the Veterans Court on appeal was Mr. Eady’s CUE claim, and the court remanded the case because it concluded that, for reasons of efficiency, the Board should not have ruled on that CUE claim separately from Mr. Eady’s related TDIU claim.
Finally, Mr. Eady asserts that under EAJA, the DVA must be correct as to both its administrative and litigation positions, and he contends that the DVA took an incorrect litigation position in this case by opposing Mr. Eady’s motion to stay the proceedings before the Veterans Court and by asking the court to dismiss the case. EAJA, however, requires a party to prevail in order to receive attorney fees, and the validity of the government’s position is irrelevant to the question whether a party has prevailed. In the case that Mr. Eady cites to support his “litigation position” argument, Scarborough v. Nicholson, 19 Vet. App. 253 (2005), the question whether the DVA’s position was substantially justified was relevant only because it was undisputed that the remand was predicated on administrative error and thus that the plaintiff had prevailed, id. at 260. We agree with the Veterans Court that Mr. Eady was not a prevailing party entitled to attorney fees and costs under EAJA, because the remand order was not predicated on agency error.
EAJA, however, requires a party to prevail in order to receive attorney fees, and the validity of the government’s position is irrelevant to the question whether a party has prevailed.
++++++++++++++++++++++++++++++++++++
remands from a federal court to an administrative agency can, in some circumstances, constitute the requisite relief on the merits. “[W]here the plaintiff secures a remand requiring further agency proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party . . . without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court.” Former Employees of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003). Not every court-to-agency remand, however, confers prevailing party status. In order for the party to be considered “prevailing,” the remand order must have been “either explicitly or implicitly predicated on administrative error.” Davis v. Nicholson, 475 F.3d 1360, 1364 (Fed. Cir. 2007).
++++++++++++++++++++++++++++++++++++
Kelly v. Nicholson, 463 F.3d 1349 (Fed. Cir. 2006). In that case, the veteran filed a claim for service connection. Although medical records contained two diagnoses, olivopontocerebellar atrophy (“OPCA”) and ataxia, the Board considered only the OPCA diagnosis, and on the basis of that diagnosis alone concluded that his claim was not well grounded. The Veterans Court remanded the case for consideration of his ataxia-based theory. The veteran then filed a request for attorney fees. Although the Veterans Court denied the request, we reversed, holding that the remand order was predicated on agency error because the Board had “fail[ed] to consider all evidence and material of record before deciding a material issue on the merits.” Id. at 1354 n.***; see also id. at 1353.
++++++++++++++++++++++++++++++++++++
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-7121
LORENZA EADY,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, Secretary of Veterans Affairs,
Respondent-Appellee.
Francis M. Jackson, Jackson & MacNichol, of Portland, Maine, for claimant-appellant.
Phyllis Jo Baunach, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for respondent-appellee. With her on the brief were Jeanne E. Davidson, Director, and Martin F. Hockey, Jr., Assistant Director. Of counsel on the brief were Michael J. Timinski, Deputy Assistant General Counsel, and Martin J. Sendek, Attorney, Office of the General Counsel, United States Department of Veterans Affairs, of Washington, DC.
Appealed from: United States Court of Appeals for Veterans Claims
Judge Mary J. Schoelen
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-7121
LORENZA EADY,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, Secretary of Veterans Affairs,
Respondent-Appellee.
Appeal from the United States Court of Appeals for Veterans Claims
in 05-0024, Judge Mary J. Schoelen.
___________________________
DECIDED: April 13, 2009
___________________________
Before BRYSON, MOORE, Circuit Judges, and CUDAHY, Senior Circuit Judge. ∗
PER CURIAM.
DECISION
Lorenza Eady appeals from a decision of the Court of Appeals for Veterans Claims denying his request for attorney fees on the ground that he failed to establish that he was a prevailing party under the Equal Access to Justice Act. We affirm.
∗ The Honorable Richard D. Cudahy, Senior Circuit Judge, United States Court of Appeals for the Seventh Circuit, sitting by designation.
BACKGROUND
Mr. Eady served on active duty in the U.S. Army from September 1964 to October 1975. In November 1975, Mr. Eady filed a claim with the Department of Veterans Affairs (“DVA”) seeking disability compensation for a psychiatric condition. The DVA regional office granted Mr. Eady service connection for anxiety neurosis and assigned him a disability rating of 30%. Mr. Eady challenged that rating on the ground that he was “not employable” and was therefore entitled to a 100% disability rating. In April 1982, the Board of Veterans’ Appeals increased Mr. Eady’s disability rating to 50%, but it did not address the question whether Mr. Eady was entitled to total disability based on individual unemployability (“TDIU”). In February 1993, the regional office awarded Mr. Eady a 100% disability rating for post-traumatic stress disorder, effective as of January 27, 1989.
In May 1993, Mr. Eady filed a Notice of Disagreement alleging clear and unmistakable error (“CUE”) in the February 1993 decision that awarded him a 100% disability rating as of January 27, 1989. Mr. Eady contended that he had been 100% disabled since 1975 and that the 100% rating should have been made retroactive to that date.
The Board of Veterans’ Appeals ruled that there was no CUE in the February 1993 rating, and the Court of Appeals for Veterans Claims (“the Veterans Court”) affirmed. Mr. Eady appealed to this court, but we dismissed the appeal after the parties entered into a settlement agreement. The settlement agreement required the DVA to adjudicate whether Mr. Eady was entitled to TDIU based on any formal or informal claim filed for any period prior to January 27, 1989. In May 2004, the regional office denied
2008-7121 2
Mr. Eady’s claim for an earlier effective TDIU date on the ground that the Board had considered, but rejected, Mr. Eady’s assertion of unemployability in a July 1988 decision denying him an increased disability rating.
Mr. Eady then filed two separate actions with the Board: (1) a Notice of Disagreement with the May 2004 decision by the regional office, in which Mr. Eady contended that neither the Board nor the regional office had previously addressed his informal claims for TDIU, and (2) a motion for revision of the Board’s April 1982 decision that awarded Mr. Eady a disability rating of 50%, on the ground that the decision was the product of CUE because the Board had improperly applied 38 C.F.R. § 4.16, the DVA regulation pertaining to TDIU. The Board issued a decision that addressed both actions on September 23, 2004. With respect to the CUE claim, the Board determined that there was no CUE in the Board’s April 1982 decision. As for Mr. Eady’s notice of disagreement with the regional office’s May 2004 decision, the Board found that the regional office had not issued a statement of the case on the issue of whether Mr. Eady was entitled to an earlier effective date for a grant of TDIU. The Board therefore remanded for a statement of the case on that issue.
Mr. Eady took an appeal to the Veterans Court. On June 27, 2007, the Veterans Court vacated the Board’s decision denying Mr. Eady’s CUE claim because it found that the two claims that were before the Board were “inextricably intertwined”:
If the appellant prevails on either claim, he is entitled to an earlier effective date for the award of an increased rating for his service-connected anxiety condition. . . . [The] CUE claim relates to the same issues currently pending before [the DVA] in the non-CUE proceeding resulting from the settlement agreement, and . . . decisions in the non-CUE proceedings may render the claim of CUE moot. 2008-7121 3
The Veterans Court therefore concluded that it was “erroneous” for the Board to have issued a final decision on Mr. Eady’s CUE claim while remanding the TDIU claim. Accordingly, the court remanded the case to the Board to reconcile the inextricably intertwined proceedings. Eady v. Nicholson, No. 05-0024 (Vet. App. June 27, 2007).
Shortly after the remand order, Mr. Eady filed an application with the Veterans Court for attorney fees and expenses pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d)(1)(A). The Veterans Court concluded that Mr. Eady was not a “prevailing party” under EAJA, and therefore denied his application for fees and other expenses. Eady v. Peake, No. 05-0024(E) (Vet. App. May 19, 2008). Mr. Eady then petitioned for review by this court.
DISCUSSION
With certain exceptions, EAJA provides that a “prevailing party” in a civil action brought by or against the United States is entitled to recover attorney fees and costs unless the government’s position was substantially justified. 28 U.S.C. § 2412(d)(1)(A). A party is considered to be a “prevailing party” if he received “at least some relief on the merits of his claim,” resulting in a “material alteration of the legal relationship of the parties.” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 603, 604 (2001); see Brickwood Contractors, Inc. v. United States, 288 F.3d 1371, 1379 (Fed. Cir. 2002) (applying Buckhannon to EAJA).
Although remands by a court of appeals to a district court typically do not confer prevailing party status, remands from a federal court to an administrative agency can, in some circumstances, constitute the requisite relief on the merits. “[W]here the plaintiff secures a remand requiring further agency proceedings because of alleged error by the
2008-7121 4
agency, the plaintiff qualifies as a prevailing party . . . without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court.” Former Employees of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003). Not every court-to-agency remand, however, confers prevailing party status. In order for the party to be considered “prevailing,” the remand order must have been “either explicitly or implicitly predicated on administrative error.” Davis v. Nicholson, 475 F.3d 1360, 1364 (Fed. Cir. 2007). The question in this case is therefore whether the Veterans Court’s remand order on June 27, 2007, was predicated on agency error.
We addressed that question in Gurley v. Peake, 528 F.3d 1322 (Fed. Cir. 2008). In that case, Mr. Gurley, a veteran, appealed to the Board seeking an increase in his disability rating for a knee injury. Mr. Gurley also claimed entitlement to service connection for a psychiatric disorder stemming from that injury, as well as entitlement to a disability rating based on TDIU. The Board issued a decision increasing the veteran’s disability rating for his knee injury but remanded both the psychiatric disorder claim and the TDIU claim to the regional office. Mr. Gurley filed an appeal in which he argued that the Board should not have separately addressed the knee injury claim while remanding the other related matters. The parties then filed a joint motion for remand, which the Veterans Court granted and incorporated by reference. The motion stated:
The parties agree that remand is warranted to comply with the Court's holding in Harris v. Derwinski, 1 Vet. App. 180 (1991). Where the facts underlying separate claims are “intimately connected”, the interests of judicial economy and avoidance of piecemeal litigation require that the claims be adjudicated together. Smith v. Gober, 236 F.3d 1370, 1373 (Fed. Cir. 2001). The Court has held that where a decision on one issue would have a “significant impact” upon another, and that impact in turn “could render any review by this Court of the decision [on the other claim]
2008-7121 5
meaningless and a waste of judicial resources,” the two claims are inextricably intertwined. Harris v. Derwinski, 1 Vet. App. 180, 183 (1991).
Gurley, 528 F.3d at 1325. Following the remand order, Mr. Gurley filed an EAJA application for attorney fees, costs, and expenses. The Veterans Court concluded that Mr. Gurley was not a prevailing party entitled to fees under EAJA because the remand order was not predicated on agency error. We affirmed, explaining that the “‘sole basis’ for the remand was judicial economy rather than administrative error.” Id. at 1328.
Mr. Eady’s case is controlled by the Gurley decision. The Veterans Court based its remand order on its conclusion that the CUE and TDIU claims, like the claims at issue in Gurley, were “inextricably intertwined” so that a decision on one claim could render a decision on the other claim moot. Furthermore, the Veterans Court expressly cited the Gurley case for the proposition that a remand would “serve[] the interest of judicial economy,” and it explained that it took no position on the merits of Mr. Eady’s CUE arguments or the substance of the Board’s decision. We therefore agree with the Veterans Court that the sole basis for the underlying remand order was judicial economy, and not agency error.
Mr. Eady contends that because the Veterans Court characterized the Board’s decision as “erroneous,” the court’s remand order was necessarily predicated on the recognition of agency error. The use of the word “error,” however, is not talismanic. The basis for the Veterans Court’s remand order was its finding that the two claims before the Board were inextricably intertwined and that addressing the two matters separately would frustrate the interest of judicial economy. That is precisely the rationale that was held not to constitute a finding of administrative error in Gurley, and it would be incongruous to reach a contrary conclusion in this case. Gurley stands for the
2008-7121 6
proposition that a remand order based on the interest of judicial economy is not a remand predicated on agency error, and that proposition applies here, notwithstanding the Veterans Court’s use of the word “erroneous.”
Mr. Eady attempts to distinguish Gurley on the ground that in Gurley, the DVA agreed to a joint remand, whereas in this case, the DVA opposed remand. It is true that a defendant’s voluntary change in conduct is insufficient to confer prevailing party status on a plaintiff. See Buckhannon, 532 U.S. at 601. However, our conclusion in Gurley was not based on the fact that the parties had agreed to a joint remand, but rather flowed from the fact that the remand was intended to promote judicial economy by ensuring that related claims would be adjudicated together. The remand in this case was predicated on that same interest in judicial economy; for that reason, Mr. Eady does not enjoy prevailing party status. The fact that the DVA did not support the remand order does not alter that conclusion.
In support of his contention that the Veterans Court’s remand order was predicated on agency error, Mr. Eady cites our decision in Kelly v. Nicholson, 463 F.3d 1349 (Fed. Cir. 2006). In that case, the veteran filed a claim for service connection. Although medical records contained two diagnoses, olivopontocerebellar atrophy (“OPCA”) and ataxia, the Board considered only the OPCA diagnosis, and on the basis of that diagnosis alone concluded that his claim was not well grounded. The Veterans Court remanded the case for consideration of his ataxia-based theory. The veteran then filed a request for attorney fees. Although the Veterans Court denied the request, we reversed, holding that the remand order was predicated on agency error because
2008-7121 7
the Board had “fail[ed] to consider all evidence and material of record before deciding a material issue on the merits.” Id. at 1354 n.***; see also id. at 1353.
In this case, the Veterans Court did not find that the Board erroneously rejected Mr. Eady’s claims on the merits, either by ignoring pertinent evidence or committing other legal error. Rather, the court ruled that, in order to serve the interest of judicial efficiency, the Board should have addressed both of Mr. Eady’s claims at the same time because a decision on one claim could render the other claim moot. The court stated that it “takes no position on the merits of the appellant’s CUE arguments, [or] the substance of the Board decision.”
To be sure, after concluding that a remand was appropriate to address both of the related claims in the same proceeding, the Veterans Court commented on what it saw as the “unfortunate” procedural history of Mr. Eady’s case:
When the RO undertook the review pursuant to the settlement agreement, it concluded that it was powerless to address the merits of the appellant's argument because granting the relief sought would entail overturning a decision of the Board based upon the same facts that were before the Board. However, in the decision on appeal, the Board found that, assuming that the appellant raised a TDIU claim prior to its April 1982 decision, such a claim would not have been before the Board, but would have remained pending before the RO. The two seemingly contrary decisions leave the appellant without a forum for [the DVA] to address his TDIU arguments. Such a result cannot be correct. . . . On remand, the Board and the Secretary should do everything in their power to straighten out the procedural quagmire that this case has become so that the Court's next review of this case, if necessary, can be on the merits of the appellant's arguments.
Those comments did not reflect disagreement with the merits of the Board’s ruling on the CUE claim. Rather, the problem that the Veterans Court characterized as a “quagmire” was the procedural problem that prevented Mr. Eady’s TDIU claim from being heard in the first instance.
2008-7121 8
2008-7121 9
As in Gurley, the court’s remand order was predicated solely on an interest in judicial economy. Its remand order was not based on the “unfortunate” procedural circumstances that led to Mr. Eady’s appeal. The court addressed those circumstances in order to clarify that the DVA should take steps to ensure that Mr. Eady gets a chance to be heard on the merits of his TDIU claim. But the sole issue that was before the Veterans Court on appeal was Mr. Eady’s CUE claim, and the court remanded the case because it concluded that, for reasons of efficiency, the Board should not have ruled on that CUE claim separately from Mr. Eady’s related TDIU claim.
Finally, Mr. Eady asserts that under EAJA, the DVA must be correct as to both its administrative and litigation positions, and he contends that the DVA took an incorrect litigation position in this case by opposing Mr. Eady’s motion to stay the proceedings before the Veterans Court and by asking the court to dismiss the case. EAJA, however, requires a party to prevail in order to receive attorney fees, and the validity of the government’s position is irrelevant to the question whether a party has prevailed. In the case that Mr. Eady cites to support his “litigation position” argument, Scarborough v. Nicholson, 19 Vet. App. 253 (2005), the question whether the DVA’s position was substantially justified was relevant only because it was undisputed that the remand was predicated on administrative error and thus that the plaintiff had prevailed, id. at 260. We agree with the Veterans Court that Mr. Eady was not a prevailing party entitled to attorney fees and costs under EAJA, because the remand order was not predicated on agency error.
Subscribe to:
Posts (Atom)