Sierra Club v. Secretary of Army, s. 86-1940

• Decision Date: 03 June 1987
• Docket Number: Nos. 86-1940,86-1950 and 86-1951,s. 86-1940
• Parties: , 17 Envtl. L. Rep. 20,991 SIERRA CLUB, Plaintiff, Appellee, v. SECRETARY OF the ARMY, et al., Defendants, Appellants. SIERRA CLUB, Plaintiff, Appellant, v. SECRETARY OF the ARMY, et al., Defendants, Appellees. SIERRA CLUB, Plaintiff, Appellant, v. SECRETARY OF TRANSPORTATION, et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 513

820 F.2d 513

26 ERC 1017, 17 Envtl. L. Rep. 20,991

SIERRA CLUB, Plaintiff, Appellee, v. SECRETARY OF the ARMY, et al., Defendants, Appellants.

SIERRA CLUB, Plaintiff, Appellant, v. SECRETARY OF the ARMY, et al., Defendants, Appellees.

SIERRA CLUB, Plaintiff, Appellant, v. SECRETARY OF TRANSPORTATION, et al., Defendants, Appellees.

Nos. 86-1940, 86-1950 and 86-1951.

United States Court of Appeals, First Circuit.

Argued April 7, 1987.

Decided June 3, 1987.

Kathleen P. Dewey with whom F. Henry Habicht II, Asst. Atty. Gen., Washington, D.C., Richard S. Cohen, U.S. Atty., F. Mark Terison, Asst. U.S. Atty., Portland, Me., and Jacques B. Gelin, Washington, D.C., were on brief, for Secretary of the Army and Secretary of Transp.

Edward F. Lawson with whom Peter L. Koff and Weston, Patrick, Willard & Redding, Boston, Mass., were on brief, for Sierra Club.

Before COFFIN, BOWNES and SELYA, Circuit Judges.

SELYA, Circuit Judge.

Sundry officials of the federal government are appellants (and cross-appellees) herein. ¹ Each is sued in his or her representative capacity. They challenge two judgments entered in the United States District Court for the District of Maine which provide that the government is liable to the plaintiff-appellee, the Sierra Club (a not-for-profit public interest group dedicated to protection of the environment), for attorneys' fees and costs under the Equal Access to Justice Act (EAJA), 28 U.S.C. Sec. 2412.

Their appeal is trichotomous: they contend that the district court failed to conduct the requisite independent analysis as to whether fee-shifting was called for under the EAJA; that in any event--independent analysis or no--the court miscalculated in determining that substantial justification was wanting for the government's course of conduct; and that, even if an EAJA liability vested, it was error to adjust the award by reference to the cost of living.

In its appeals--there are two, see post--the Sierra Club asserts that the attorneys' fees authorized by the district court were too skimpy. The fees should be increased beyond the inflation-adjusted time-and-rate formulation, this thesis runs, because of the largely contingent nature of the compensation arrangement between the Club and its lawyers.

We affirm the judgments of the district court in all respects.

I. BACKGROUND

There were two separate--but related--cases brought in the district court, and hence, two separate judgments entered which pertain to fees. Both cases dealt with the Sierra Club's efforts to block aspects of the suggested development of a marine terminal, cargo port, and, possibly, an industrial park, at Sears Island, Maine. The first suit entailed a disagreement about whether the project would "significantly affect[ ] the ...environment." 42 U.S.C. Sec. 4332(2)(C). Various federal agencies concluded that it would not, and allowed the development to go forward without the preparation of an Environmental Impact Statement (EIS). The district court found in favor of the government on all five counts of the plaintiff's complaint, agreeing that an EIS was not required. We reversed; we held that, under the National Environmental Policy Act (NEPA), 42 U.S.C. Secs. 4321 et seq., an EIS was needed. Sierra Club v. Marsh, 769 F.2d 868 (1st Cir.1985) (Sierra I ). Inasmuch as we viewed the plaintiff's NEPA argument as dispositive, we had no occasion to reach the question of whether the other federal laws and regulations enumerated in the complaint had been abridged.

In the second suit, the district court held that yet another federal agency, the Coast Guard (an arm of the federal Department of Transportation), had violated the General Bridge Act of 1946, 33 U.S.C. Sec. 525(b), by issuing a permit for the construction (as part of the same project) of a proposed causeway from Kidder Point to Sears Island. The district court revoked the permit. Although the federal defendants acquiesced at this juncture, the state of Maine unsuccessfully appealed the revocation order. See Sierra Club v. Secretary of Transportation, 779 F.2d 776 (1st Cir.1985) (Sierra II ).

We will not address the details of these prior proceedings beyond the extent necessary to put the matters before us into due perspective. The opinions in Sierra I and Sierra II are comprehensive, and the reader with a penchant for exegetic detail is best referred to them. It suffices for the moment to note that the Sierra Club, having gotten the basic relief which it set out to garner, then applied for, and was awarded, attorneys' fees and expenses under the EAJA. Sierra Club v. Marsh, 639 F.Supp. 1216 (D.Me.1986) (Sierra III ). These appeals followed. ²

The government acknowledged in the district court that the Sierra Club was a "prevailing" litigant within the meaning of 28 U.S.C. Sec. 2412(d)(1)(A) as to both suits. Sierra III, 639 F.Supp. at 1217-18. It likewise conceded that the plaintiff was a "party" eligible to advance an EAJA claim. Id. at 1218. It has not asserted that "special circumstances" exist which should foreclose a fee award in this instance. Its appeal, therefore, boils down to whether the Sierra Club deserved fees for Sierra I under appropriate EAJA criteria, ³ and if so, how the amount should have been computed. We turn directly to the questions so presented.

II. THE INDEPENDENT ANALYSIS REQUIREMENT

While the EAJA is designed to "encourage relatively impecunious private parties to challenge abusive or unreasonable governmental behavior by relieving such parties of the fear of incurring large litigation expenses," United States v. 1,378.65 Acres of Land, 794 F.2d 1313 1315-16 (8th Cir.1986) (citing Spencer v. NLRB, 712 F.2d 539, 549 (D.C.Cir.1983), cert. denied, 466 U.S. 936, 104 S.Ct. 1908, 80 L.Ed.2d 457 (1984)), it does not allow the automatic shifting of fees. If the government can demonstrate that its position was substantially justified or that unusual circumstances existed which would make an award unjust, then the fee tree does not flower, notwithstanding that the applicant is a prevailing party within the meaning of the statute. In surveying this terrain, the court must examine both the position of the federal sovereign in the underlying litigation and the governmental conduct which led to that litigation. See 28 U.S.C. Sec. 2412(d)(2)(D) (1985). Despite earlier uncertainty, it is by now well settled that the "position" which must be justified comprises "both the position of the agency and the litigation position of the government." United States v. Yoffe, 775 F.2d 447, 449 (1st Cir.1985).

The government has the burden of proving substantial justification by a preponderance of the evidence. Id. at 450. In order to carry the devoir of persuasion, the government must show that it had a reasonable basis for the facts alleged, that it had a reasonable basis in law for the theories it advanced, and that the former supported the latter. Id. That the government lost in the underlying litigation does not create a presumption that its position was not substantially justified. But, there is a flip side to the coin: the sovereign is not exempted from liability under the EAJA merely because it prevailed at some interim point in the judicial process. Id. See also Martin v. Heckler, 754 F.2d 1262, 1264 (5th Cir.1985).

Viewed through such a glass, it becomes readily apparent that the test of reasonableness in the precincts patrolled by the EAJA is different from that applied for purposes of determining whether agency action or inaction is "reasonable" or "unreasonable," i.e., arbitrary and capricious, under, say, the Administrative Procedure Act, 5 U.S.C. Secs. 701 et seq. As Emerson said of nature, reasonableness "is a mutable cloud, which is always and never the same." R.W. Emerson, Essays: First Series (1841). Congress was painstaking in creating a distinct legal standard "substantially justified"--for EAJA use, rather than merely echoing the familiar "arbitrary and capricious" refrain. ⁴ We have equated that standard with a test of reasonableness, United States v. Yoffe, 775 F.2d at 450--but it remains, nonetheless, a test tailored to the dictates of the EAJA.

To be sure, these disparate ways of assessing reasonableness will, at times, overlap--indeed, a factfinder must take into account essentially the same underlying facts and legal arguments in discerning what is "reasonable" for either purpose. Nevertheless, because of the definitional differences, the district court must carefully refrain from treating every reversal of agency action as the functional equivalent of an "unreasonable" position in the EAJA sense. Cf. Riddle v. Secretary of Health and Human Services, 817 F.2d 1238 (6th Cir.1987) (LEXIS, Genfed library, U.S.App. file); Federal Election Comm'n v. Rose, 806 F.2d at 1089-90. An exercise of independent judgment is essential to determine whether an EAJA award is warranted; the answer is not "wedded to the underlying judgment on the merits." Id. at 1087. Though both roads may in a given instance lead to Rome, that will not always be the case. At times, they will lead to different destinations. Any other approach would demean the precise language of the Act. As the Federal Circuit has said: "Making the outcome of the case determinative would virtually eliminate the 'substantially justified' standard from the statute." Broad Avenue Laundry & Tailoring v. United States, 693 F.2d 1387, 1391 (Fed.Cir.1982). Accord Washington v. Heckler, 756 F.2d 959, 961 (3d Cir.1985). We defer to Congress's judgment that a separate yardstick should be employed to measure the propriety of fee-shifting as against the federal sovereign. Thus, after the merits of a case have been adjudicated, fresh and distinctive inquiry is needed to determine whether a fee entitlement vests under EAJA.

III. THE INQUIRY BELOW

The government contends that, in this case, the district court did violence to these tenets. In essence, the appellants claim that the court...