Brickwood Contractors, Inc. v. U.S.

• Decision Date: 03 May 2002
• Docket Number: No. 01-5121.,01-5121.
• Citation: 288 F.3d 1371
• Parties: BRICKWOOD CONTRACTORS, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

288 F.3d 1371

BRICKWOOD CONTRACTORS, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

No. 01-5121.

United States Court of Appeals, Federal Circuit.

May 3, 2002.

COPYRIGHT MATERIAL OMITTED

Robert M. Moore, Moore & Lee, of McLean, VA, for plaintiff-appellee. With him on the brief was Kristen A. Bennett.

Michael E. Robinson, Attorney, Appellate Staff, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellant. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; and Michael Jay Singer, Attorney. Of counsel were David M. Cohen, Director, Commercial Litigation Branch; and Robert E. Kirschman, Jr., Attorney. Also of counsel was Richard G. Welsh, Attorney, Office of General Counsel, U.S. Department of the Navy, of Washington, DC.

Before CLEVENGER, RADER, and PROST, Circuit Judges.

PROST, Circuit Judge.

The principal issue in this case is the applicability of the Supreme Court's recent decision in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), to the fee-shifting provisions of the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. The United States Court of Federal Claims, in a decision dated June 29, 2001, held that Brickwood Contractors Inc.'s ("Brickwood") recovery of attorney fees under the EAJA is not barred by Buckhannon. Because we disagree with the Court of Federal Claims' conclusion that Buckhannon does not apply to the EAJA and its alternative theories that attorney fees in this case are permissible under Buckhannon, we reverse.

BACKGROUND

On February 9, 1999, the Department of the Navy ("Navy") issued an Invitation for Bids ("IFB") to repair elevated water storage tanks at the Naval Air Station, Patuxant River, Maryland. Thereafter, the Navy issued amendments to the solicitation adding Polychlorinated Biphenyl ("PCB") contamination testing to the base requirements and adding three options related to removing PCB contamination from the water storage tanks. Five bids (base bid plus options) were received and publicly opened on April 6, 1999, with Brickwood identified as the apparent lowest bidder. As a result of further testing, however, the Navy determined there was no evidence of PCB contamination and on May 5, 1999, announced that the bids on the options were no longer needed and would therefore be excluded from the final price evaluation. Because of this change, Brickwood no longer had the lowest bid.

On June 15, 1999, the Navy further amended the solicitation, converting it from an IFB, or a solicitation of bids, to a Request for Proposals ("RFP"), or a negotiated procurement, deleting the Evaluation of Options and eliminating the requirements regarding PCBs. The Navy intended to negotiate with the bidders whose bids did not include the now determined unnecessary PCB testing.

On June 18, 1999, Brickwood filed a bid protest in the Court of Federal Claims seeking to enjoin the Navy from converting the IFB to an RFP and to direct the Navy to award the contract to Brickwood. A hearing was held on Brickwood's request for a temporary restraining order ("TRO") on June 21, 1999. On July 16 1999, prior to any court decision on that TRO request, the Navy filed a Motion to Dismiss informing the court that "[a]fter further consideration of both the circumstances surrounding the solicitation and the governing FAR provisions, and in light of the Court's comments at the TRO hearing, the Navy has cancelled the solicitation and plans to re-solicit using a new IFB." The court dismissed Brickwood's protest on July 22, 1999, "without reaching the merits of the case."

Thereafter, on August 23, 1999, Brickwood filed an EAJA application seeking attorney fees and expenses for work performed on the lawsuit protesting the Navy's attempted conversion to an RFP and on the EAJA application.

In its opinion dated April 9, 2001, the Court of Federal Claims found that Brickwood satisfied the requirements necessary for entitlement to attorney fees and expenses under the EAJA.¹ Brickwood Contractors, Inc. v. United States, 49 Fed. Cl. 148, 150 (2001) ("Brickwood I"). Applying the "catalyst theory" of "prevailing party" status pursuant to the EAJA, the court found that Brickwood was the "prevailing party" because it had succeeded on a significant issue in the litigation that resulted in a benefit to the plaintiff. In so doing, the court relied on what it termed the "advice" offered by the Supreme Court in Hewitt v. Helms, 482 U.S. 755, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987), a case interpreting the "prevailing party" requirement with respect to attorney fees under the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988. That "advice" was:

A lawsuit sometimes produces voluntary action by the defendant that affords the plaintiff all or some of the relief he sought through a judgment — e.g., a monetary settlement or a change in conduct that redresses the plaintiff's grievances. When that occurs, the plaintiff is deemed to have prevailed despite the absence of a formal judgment in his favor.

Id. at 760-61, 107 S.Ct. 2672.

Notably, in applying Hewitt's interpretation of the term "prevailing party" in 42 U.S.C. § 1988 to the same term in the EAJA, the court observed that "this construction of prevailing party is consistent with the policy behind EAJA, to compensate parties who cause the government to conform to the law." Brickwood I, 49 Fed. Cl. at 154-55. The court further found that the government's position in litigation (and its underlying conduct regarding the procurement) was not substantially justified, and that there were no special circumstances that would make the award of fees unjust. Id. at 163. Final judgment was issued on May 1, 2001, awarding plaintiff $10,939.00 in attorney fees and expenses.

On May 29, 2001, the Supreme Court issued its opinion in Buckhannon denying the plaintiff's fee claim under the Fair Housing Amendments Act of 1988, 42 U.S.C. § 3613(c)(2) ("FHAA") and the Americans with Disabilities Act of 1990, 42 U.S.C. § 12205 ("ADA"). In so doing, the Court rejected the "catalyst theory" as a basis for attorney fee awards under fee shifting statutes because it allows a fee award "where there is no judicially sanctioned change in the legal relationship of the parties." Buckhannon, 532 U.S. at 605, 121 S.Ct. 1835.

On June 8, 2001, the government filed a motion for relief from the court's prior judgment awarding attorney fees to Brickwood pursuant to Rule 60(b) of the Rules of the United States Court of Federal Claims, arguing that the Supreme Court's decision invalidated the basis of that judgment. The court concluded, however, that Buckhannon did not bar recovery by Brickwood and thus denied the government's motion.² First, the court held that Buckhannon does not apply to the determination of "prevailing party" under the EAJA, stating broadly that "[t]he standards for meeting the `prevailing party' requirement recently set forth in Buckhannon conflict with the plain language and the legislative history of the EAJA." Brickwood II, 49 Fed. Cl. at 745 n. 5. The court based its conclusion on the fact that while Buckhannon applied to two specific statutes (the FHAA and the ADA) and referenced three others, the EAJA was not mentioned. Further, the court contrasted the EAJA and the five cited feeshifting statutes, noting that the former stated that an award "shall be made unless the court finds that the position of the United States was substantially justified," whereas the latter allowed broad discretion to trial courts by use of the term "may" without any further "substantial justification" requirement. Id. at 746-47 (emphases added). The court concluded that these distinctions were significant in the context of construing the term "prevailing party": "Because the `substantially justified' analysis directs the court to consider the merits of the case underlying the EAJA application, a plaintiff cannot prove the legal merits of the case solely through the `prevailing party' requirement." Id. at 747. Thus, based on this analysis, the court concluded that the term "prevailing party," as it appears in the EAJA, means something different from that same term in other fee-shifting statutes. Id.

Second, the court concluded that the facts in Brickwood II were materially distinguishable from those in Buckhannon since the latter involved a change by the legislature in eliminating the requirements at issue in the litigation. Thus, in Buckhannon neither the Court nor the plaintiffs had a direct role in the action that engendered resolution of the case. Id. at 744.

Finally, the court held, in the alternative, that Brickwood is a "prevailing party" even if Buckhannon applies by virtue of the comments made by the court at the June 21, 1999, TRO hearing. Id. at 747-49. According to the court, although it did not issue a written opinion, at the TRO hearing it "announced its acknowledgement of the merits of plaintiff's claims, the rectitude of plaintiff's position, and the error of defendant's actions." Id. at 748. Those remarks, the court concluded, "amounted to a finding that the Navy had acted unlawfully ..." and "represent the necessary `judicial imprimatur' that caused the change in the legal relationship of the parties." Id. at 749. In this regard, the court also expressed its "strong" opinion that "to interpret Buckhannon as requiring formal written judgments on the merits or formal findings of unlawful conduct will inhibit settlements and discourage parties from taking self-corrective action such as that taken by defendant in Brickwood." Id.

The United States filed a timely notice of appeal on July 2, 2001, from both the May 1, 2001, judgment and the June 29 2001, order denying the Rule 60(b) motion. This court has jurisdiction pursuant to 28 U.S.C. 1295(a)(3).

DISCUSSION

This court reviews a trial court's decision to...