Air Transport Ass'n of Canada v. F.A.A.
| Decision Date | 09 October 1998 |
| Docket Number | 97-1363 and 97-1364,97-1356,Nos. 97-1360,97-1357,97-1358,97-1362,97-1359,s. 97-1360 |
| Citation | 156 F.3d 1329 |
| Parties | AIR TRANSPORT ASSOCIATION OF CANADA, Petitioner, v. FEDERAL AVIATION ADMINISTRATION, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Before: WALD, SENTELLE, and HENDERSON, Circuit Judges.
O R D E R
This matter coming to be heard and being heard before the court upon the application of the Air Transport Association of Canada for reimbursement of attorneys' fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d), and it appearing to the court for the reasons set forth more fully in the opinion filed contemporaneously herewith that the motion is well taken, it is hereby
ORDERED, ADJUDGED, and DECREED that the United States reimburse the Air Transport Association of Canada for attorneys' fees and expenses incurred during its preparation for Asiana Airlines v. Federal Aviation Administration, 134 F.3d 393 (D.C.Cir.1998), in the amount of $99,246.33 this 9th day of October, 1998.
Opinion for the court filed by Circuit Judge SENTELLE.
On Petitioner's Motion for Attorneys' Fees
On January 30, 1998, we issued an opinion allowing multiple consolidated petitions to vacate a fee schedule imposed by the Federal Aviation Administration ("FAA" or "the Administration") against foreign air carriers for services provided to airline overflights. The matter now returns to us on the application of Air Transport Association of Canada ("ATAC"), one of the original petitioners, for attorneys' fees. The FAA offers various objections both as to ATAC's entitlement and the amount of the fees sought. Finding the application to be meritorious, and the objections to be without merit, for the reasons more fully set out below, we allow the application.
In our original opinion in this matter, Asiana Airlines v. Federal Aviation Administration, 134 F.3d 393 (D.C.Cir.1998), we reviewed an FAA fee schedule established pursuant to 49 U.S.C. § 45301(a)(1) covering "[a]ir traffic control and related services provided to aircraft other than military and civilian aircraft of the United States government or of a foreign government that neither take off from, nor land in, the United States." Petitioners therein raised several procedural and substantive objections to the schedule. We rejected procedural challenges for reasons set forth in our earlier opinion, but concluded that the substantive objections were meritorious. Therefore, we vacated the schedule in its entirety and remanded to the FAA for further proceedings. Petitioners' objection, with which we agreed, was straightforward. In the enabling statute, Congress had expressly directed the Administration to "ensure that each of the fees required ... is directly related to the Administration's costs of providing the service rendered," 49 U.S.C. § 45301(b)(1)(B). The FAA conceded the correctness of petitioners' rather unremarkable interpretation that the statute forbade the agency from basing fees on the value of services to the recipient rather than on cost to the provider. Because the Administration had determined its fee schedule based in essential part on the use of a system called "Ramsey pricing," which derived from nothing other than the value of services to the recipient, we had no difficulty in ruling that petitioners' substantive objection was well taken. 134 F.3d at 401-03. Because the rule before us and the supporting material "suggest[ed] no way to circumscribe a component of the fees based entirely on direct costs of services," we struck down the schedule in its entirety. Id. at 403. Successful petitioner ATAC now seeks recompense for a portion of its attorneys' fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). Under that Act, we are required to "award to a prevailing party" of qualifying size against the United States fees and expenses inclusive of "reasonable attorney fees," subject to defenses and exceptions created by the Act. 28 U.S.C. § 2412(d)(1)(A) & (2)(A). While conceding that ATAC is a prevailing party for purposes of the Act, the FAA contests both its entitlement to fees and the amount of those fees on statutory grounds. Upon review of ATAC's claims and the FAA's defenses, we conclude that ATAC is correct as to its entitlement and the amount.
The EAJA provides, in pertinent part, that "a court shall award to a prevailing party ... fees and other expenses ... incurred by that party in any civil action ... including proceedings for judicial review of an agency action, brought by or against the United States ... 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). While the FAA concedes that ATAC is a prevailing party and meets other criteria for the award of fees, it contests ATAC's entitlement, arguing that the position of the United States (in this case, its agency FAA) was substantially justified and that special circumstances would make an award unjust. Both objections fail.
Where, as here, a movant under the EAJA has established that it is a prevailing party, "the burden is on the government to show that its litigation position was substantially justified on the law and the facts." Cinciarelli v. Reagan, 729 F.2d 801, 806 (D.C.Cir.1984). To establish substantial justification, the government need not establish that it was correct--indeed, since the movant is established as a prevailing party it could never do so--but only that its position is one that "a reasonable person could think ... correct, that is, [that the position] has a reasonable basis in law and fact." Pierce v. Underwood, 487 U.S. 552, 566 n. 2, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). The FAA claims that it has met that standard because ATAC raised five issues in its appeal, and the FAA prevailed on four of them. The Administration argues that we should conclude that the government's position was reasonable "on the full range of issues ATAC presented" and was therefore substantially justified. Brief of the FAA, citing Roanoke River Basin v. Hudson, 991 F.2d 132, 139 (4th Cir.1993).
We cannot accept what the government styles as a "holistic approach" to determining whether an agency's position is substantially justified under the Act so as to bar the recovery of attorney fees by a prevailing party. That is, it cannot be the case that Congress intended that a party who prevails on an essential ground of a petition to set aside government action cannot recover the congressionally contemplated fees because the government's action was substantially unjustified on only one of several possible bases. Virtually any government action is either grouped with other actions or is a component of some greater action. Presumably the government is usually substantially justified on most of its actions. If a litigant who has successfully challenged a government action as substantially unjustified and achieved a complete victory in terms of the relief prayed cannot recover EAJA fees because of this well-nigh universal grouping, then Congress's enactment of the EAJA becomes a virtual nullity. While we do not suggest that the substantial justification question can be determined without context, this does not mean that the context can be so "holistic" as to allow the government's generally justifiable conduct to defeat the otherwise legitimate EAJA claim of a litigant who has succeeded in obtaining precisely the relief it prayed from the government because of the substantially unjustified element under litigation. If the government would defeat ATAC's claim, it must do so by showing that the Administration's use of Ramsey pricing was substantially justified.
The Administration makes a stab at justifying its action. It admits certain inarguable propositions: Congress directed it to "ensure that each of the fees required ... is directly related to the Administration's costs of providing the service rendered," 49 U.S.C. § 45301(b)(1)(B) (emphasis added); Ramsey pricing allocates each fee not on a cost basis but on the basis of the inflexibility of the demand among the users; the Administration determined each fee charged ATAC and the other petitioners on the basis of Ramsey pricing. Nonetheless, in the face of these admitted inarguables, the Administration insists that because the total price structure was designed to recover the Administration's costs, that meant that the scheme complied with the statutory requirement that each fee be cost based. To allow that reasoning to control would be to write out of the statute the requirement that "each of the fees" be "directly related" to the cost of providing the service rendered. All that the Administration's reasoning can establish is that the totality of the fees charged all users is ultimately related to the cost of providing all services. We cannot hold that an attempt by an agency to completely displace Congress is substantially justified. We therefore hold that the respondent has failed to meet its burden of establishing that its actions meet this exception to the Equal Access to Justice Act.
The Administration next argues that even if ATAC's fee petition survives the substantial justification exception, it should be denied under the second statutory exception denying fees when "special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). The statute makes no attempt to define or in any way delineate what circumstance might be of the special sort warranting an exception to the EAJA. The statutory history, for what it's worth, includes a passage in the House Report accompanying the EAJA describing this exception as a "safety valve" and declaring that it
helps to insure that the Government is not deterred from...
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