Chiu v. U.S.

• Decision Date: 29 October 1991
• Docket Number: No. 90-5044,90-5044
• Citation: 948 F.2d 711
• Parties: Hong-Yee CHIU, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 711

948 F.2d 711

Hong-Yee CHIU, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 90-5044.

United States Court of Appeals, Federal Circuit.

Oct. 29, 1991.

Michael J. Kator, Kator, Scott & Heller, Washington, D.C., argued for plaintiff-appellee. With him on the brief was Richard A. Salzman.

George M. Beasley, III, Sr. Trial Counsel, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendant-appellant. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen. and David M. Cohen, Director.

Before NIES, Chief Judge, COWEN, Senior Circuit Judge, and MAYER, Circuit Judge.

NIES, Chief Judge.

This is an appeal by the government from the judgment of the United States Claims Court granting Hong-Yee Chiu attorney fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 (1988) (EAJA), in an amount of $39,001.44. The government contests both the Claims Court's decision that Chiu is entitled to an award of attorney fees, Chiu v. United States, 17 Cl.Ct. 334 (1989), and the Claims Court's interpretation of the EAJA with respect to calculating the amount of a cost of living adjustment (COLA) by which the court increased the statutory rate of $75 an hour, Chiu v. United States, 18 Cl.Ct. 567 (1989). We affirm the Claims Court's judgment insofar as entitlement is concerned, but reverse and remand on quantum.

BACKGROUND

The present appeal concerns an award of attorney fees incurred for litigation of a dispute over the elimination of Chiu's position by the National Aeronautics and Space Administration (NASA) via Reduction-in-Force (RIF), which occurred in 1978. After losing in the Civil Service Commission proceedings, Chiu filed suit in the United States Court of Claims pursuant to 5 U.S.C. § 7703(b)(1) (1978) (amended 1982). The Court of Claims remanded to the Merit Systems Protection Board (MSPB), which had become the administrative review tribunal, for reconsideration in light of a newly obtained deposition, that of Chiu's supervisor, Dr. Jastrow, the NASA official responsible for proposing the RIF of Chiu's position. On remand, the MSPB reviewed Dr. Jastrow's conduct and ruled that the RIF did not accord with the relevant regulations in that Dr. Jastrow had been motivated to eliminate Chiu personally because of Dr. Jastrow's dissatisfaction with Chiu's work rather than because of a need to eliminate the position he occupied. Accordingly, the MSPB directed NASA to reinstate Chiu with full back pay and benefits, which was done. Pursuant to the parties' stipulation, Chiu then filed an application with the Claims Court ¹ for attorney fees under the Back Pay Act, 5 U.S.C. § 5596 (1982) (BPA), and the EAJA, and the issue of attorney fees has been the sole focus of On remand, the case was assigned to Judge Andewelt, who determined that the government's position was not "substantially justified" over the entire course of the RIF action and subsequent litigation before the MSPB and Court of Claims. Chiu, 17 Cl.Ct. at 340. He based this conclusion on the agency's failure to demonstrate that Jastrow's recommendation to separate Chiu was based on Chiu's area of research not being worthy of support rather than on dissatisfaction with Chiu's performance. Id. at 339. Further, he found no overriding justification for the position of the United States.

                this litigation since 1982.   The Claims Court initially denied Chiu's application for attorney fees.   See Chiu v. United States, 6 Cl.Ct. 18 (1984) (Yannello, J.).   The Claims Court concluded that the BPA did not support an award of attorney fees and that an award of attorney fees under the EAJA was not warranted because the position of the government in the litigation before the court was "substantially justified."  Id. at 23-24.   Chiu appealed to this court which affirmed on the basis of the opinion of the Claims Court.  Chiu v. United States, 770 F.2d 180 (Fed.Cir.1985) (Table).   Chiu followed with a petition for rehearing in banc.   On the day Chiu's petition was denied in banc consideration, President Reagan signed into law an amendment to the EAJA which provided that the "position of the United States" included the "action or failure to act by the agency upon which the civil action is based" as well as the position taken by the United States in the litigation.   See Pub.L. No. 99-80, § 2(c)(2)(B), 99 Stat. 183, 185 (1985).   As a result of this amendment and this court's subsequent decision in Gavette v. Office of Personnel Management, 808 F.2d 1456, 1465-66 (Fed.Cir.1986) (in banc), which ruled that the new standard applied to all cases pending on the date of the enactment and placed the burden on the government to justify its position, this court vacated its judgment denying Chiu's attorney fee application and remanded the case for reconsideration.   See Chiu v. United States, 887 F.2d 1094 (Fed.Cir.1986) (Table)
                

The EAJA provides for an attorney fee award based on a $75 per hour rate with certain possible adjustments. The Claims Court adjusted this rate to $102.73 per hour, construing the statute to allow an adjustment by reason of inflation from the time the $75 figure was set in 1981 to the date of the fee award on June 28, 1989, and applied that rate to all of the attorney's hours of work throughout the years of litigation. See Chiu, 18 Cl.Ct. at 571-72.

The government appeals the judgment both as to entitlement and quantum. We exercise jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) (1988).

ISSUES

A. Whether the Claims Court abused its discretion by determining that the government's position throughout these proceedings was not "substantially justified" within the meaning of the EAJA?

B. Whether the Claims Court erred as a matter of law in making an upward adjustment to the EAJA hourly fee rate for an increase in the cost of living which included time periods after legal services were performed?

DISCUSSION

A trial court's decision to award attorney fees under the EAJA, and its determination of the amount of such an award, are discretionary. On appeal, decisions concerning attorney fees are reviewed for abuse of discretion. See Pierce v. Underwood, 487 U.S. 552, 557-63, 108 S.Ct. 2541, 2545-49, 101 L.Ed.2d 490 (1988). Thus, only if the trial court erred in interpreting the law or exercised its judgment on clearly erroneous findings of material fact, or its decision represents an irrational judgment in weighing the relevant factors can its decision be overturned. PPG Indus., Inc. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1570-72, 6 USPQ2d 1010, 1015-16 (Fed.Cir.1988) (Bissell, J., additional views); Oliveira v. United States, 827 F.2d 735, 742 (Fed.Cir.1987); see also Friendly, Indiscretion About Discretion, 31 Emory L.J., 747, 762-63 (1982). Upon review of

the Claims Court's entitlement and quantum determinations in the instant case, we conclude that the trial court did not abuse its discretion on entitlement, but that the Claims Court's calculation of the inflation factor is contrary to law.

A. ENTITLEMENT

The EAJA provides a specific waiver of sovereign immunity to enable persons who prevail in certain suits brought against the government to an award of attorney fees incurred in challenging the government's action in court. Fidelity Constr. Co. v. United States, 700 F.2d 1379, 1385-86 (Fed.Cir.), cert. denied, 464 U.S. 826, 104 S.Ct. 97, 78 L.Ed.2d 103 (1983). Section 2412(d)(1) provides, in relevant part:

(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, ... 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 action, 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). Absent this or some other specific statutory waiver of sovereign immunity, attorney fees may not be recovered in suits against the United States. ² Escobar v. United States Immigration & Naturalization Serv., 935 F.2d 650, 653 n. 4 (4th Cir.1991); Spencer v. National Labor Relations Bd., 712 F.2d 539, 544 (D.C.Cir.1983), cert. denied, 466 U.S. 936, 104 S.Ct. 1908, 80 L.Ed.2d 457 (1984). There is no dispute in this case as to Chiu's status as a "prevailing party." Thus, Chiu is entitled to an award of attorney fees unless the court finds "special circumstances" which make an award unjust or that the government's position is "substantially justified." Gavette, 808 F.2d at 1466. The government pressed arguments on both "special circumstances" and "substantial justification" to the Claims Court but prevailed on neither. On appeal, the government has dropped its "special circumstances" argument and urges only that we rule that the Claims Court abused its discretion in finding the position of the government not "substantially justified." We cannot hold, however, that the Claims Court's determination of no substantial justification was an abuse of discretion.

What meaning to ascribe to the statutory language that the "position of the United States" must be "substantially justified" is not readily apparent. As indicated previously, in 1985 the EAJA was amended to clarify the meaning of "position of the United States." Subparagraph (1)(B) of section 2412(d) was revised to read:

Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought. [Emphasis added.]

Similarly, subparagraph (2)(D) was added to reflect that

(D) "position of the United States," means, in addition to the position...